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COEXRIGHT DEPOSrr. 



COMMERCIAL LAW 

FOR 

HIGH SCHOOLS, BUSINESS COLLEGES 

AND 

BUSINESS MEN 



BY 

WAYNE C. TOWNLEY, A.B., LL.B. 

FORMERLY INSTRUCTOR COMMERCIAL LAW 
BLOOMINGTON HIGH SCHOOL 



PRACTICING MEMBER 

BLOOMINGTON, ILLINOIS, BAR 

MEMBER ILLINOIS BAR 



j^^m^ 




NEW YORK 

HENRY HOLT AND COMPANY 

1922 






i 



Copyright, 1922, 

BY 

WAYNE C. TOWNLEY 
August, 1922 



Printed in U.S. A. 



5C1^e ILakrsttie ^resg 

E. R. DONNELLEY & SONS COMPANY 
CHICAGO 



AUG 23 (922 

©C1A686131 

"vvtf 1 



DEDICATED TO 
MY FATHER, C. S. TOWNLEY 



PREFACE 

The laws of all the States (except Louisiana) are based 
upon the Common Law of England. Consequently the 
student knowing the laws of Illinois knows the funda- 
mental law of all the States. It seems better to study the 
laws of one State than to give cases from all the States 
since to master one system is easier than forty-eight. 

There is no book on the market that deals with only 
Illinois law. The Author is in a new field altogether in 
this respect. The fundamental laws of the State can be 
learned without reference to Statutes or Reports. It is 
needless to point out the value of this to business men 
and law students. 

The aim is not to make lawyers, but to guide men in 
business transactions. The day of buying a book and 
becoming a lawyer is not here. It would be as reason- 
able to expect one to buy a stock of drugs and become 
a doctor. 

While this is written to fit the needs of elementary 
study yet the Author has been gratified to learn that it 
has been of value as a ^^quizzer'' for students preparing 
for the IlUnois State Bar Examination. 

Actual cases rather than the theoretical have been 
emphasized. Almost without exception the illustrations 
are cases taken from the Illinois Supreme Court Reports, 
stated in the simplest language. The specific predominates 
rather than the general. As far as possible technical terms 
have been avoided. 

The Author wishes to thank Mr. W. A. Goodier for his 
reading of the manuscript; to express his appreciation of 



vi PREFACE 

the advice and suggestions of Mr. S. P. Irwin and to 
acknowledge the assistance of Mr. E. H. Cooke. 

Wayne C. Townley. 
Bloomington, lUinois. 
May 10, 1922. 



I 



VENERATION OF THE LAW 

^'The earliest conception of justice appears to have 
been not an act of any lawmaking assembly, but a judg- 
ment pronounced by the primitive ruler — the patriarch- 
king. In the belief of his people it was a divine inspiration, 
what we should call a stroke of genius. 

We have traveled a long road since then. How can we 
expect men any longer to revere the law, which they now 
understand to be no gift of a god, but only the result of 
conflicting social forces — a conflict in which, perhaps, the 
individuaFs own idea of what the law should be has been 
overborne?' And yet, if men are capable of taking a 
broader view they will see that there is really something 
noble and august in this conception of law as the expressed 
will of a free and mighty people; and there should be 
something impressive, not to say awe-inspiring, in the 
visible enforcement of that will. This may not be the 
poorest of all times to consider whether it may not be 
worth all the pains we take to surround the execution of 
the law with every form of dignity, and propriety that 
may serve to touch the imagination of the people, and 
lead them to associate the act with all that is worthy of 
regard and veneration. For one thing is certain; there 
never was a great people that did not venerate the law. 
What gave Sparta her long supremacy among the states 
of Greece? What, indeed, but her inflexible — you might 
almost call it her blind and unreasoning — ^fi^dehty to law? 
'* Stranger, go tell the Spartans that we lie here in obedience 
to their laws. '' Those were the words graven on the tomb 



viii VENERATION OF THE LAW 

of Leonidas and his companions at Thermopylae. There 
they slept in unquestioning obedience to a law that said 
no Spartan ever should retreat, no matter what the odds. 
Such a sentiment, inspiring all its members, is enough to 
make any nation great. Without some such reverence for 
law, the authentic voice of our millions of self-governed 
men, we may pile our wealth in mountains, but we shall 
be as a rope of sand. ^' 

— Address of Justice Wendell Phillips Stafford at the rededication 
of the Courthouse of the Supreme Court of the District of Columbia. 

—The Docket. 



CONTENTS 

CHAPTER PAGE 

I. The Basis of Law 3 

1. Definition 3 

2. Kinds of law 3 

A. Criminal law 3 

B. Civil law 3 

(a) Commercial law 4 

3. What law is supreme 4 

A. Powers 5 

B. States Rights vs. National Rights 6 

4. Divisions of our government 6 

5. Growth of Common Law Courts 7 

6. Defects of Common Law Courts 7 

7. Law Merchant Courts 8 

8. Chancery Courts 8 

9. Difference between Law and Chancery Courts. . 9 

10. Influence of English laws 9 

11. Following precedents 9 

11. Courts. 

1. Object of Courts 12 

2. Jurisdiction 12 

3. Federal Courts 14 

A. Officers 15 

4. Courts of Illinois 16 

A. Officers 17 

III. Contracts 19 

1. Defined 19 

2. Classification 19 

A. Express and implied 19 

(a) Written and unwritten 20 

(b) Formal and simple 20 

3. Three classes 21 

A. Valid 21 

B. Voidable 21 

C. Void 21 

ix 



CONTENTS 

PAGE 

4. Essentials 22 

A. Competent parties 22 

(a) Number of parties necessary 22 

(b) What parties are competent? 23 

1. Contracts of infants 23 

A. Voidable contracts 23 

(a) When may infants dis- 

affirm? 24 

(b) Fraudulent conduct 25 

(c) On disaffirming, must he 

restore benefits? 25 

(d) Who may disaffirm for 

infants? 26 

(e) Ratification 26 

B. Valid contracts of infants 26 

C. Void contracts of infants .... 28 

2. Contracts of insane persons 28 

A. Compared with infant's con- 
tracts • 28 

3. Contracts of drunken persons .... 29 
A. Voidable 29 

B. Agreement 29 

(a) Offer and acceptance 29 

1. Minds must meet 30 

A. Must intend contract 30 

2. When offer can be withdrawn. . . . 30 

3. When offer cannot be withdrawn. 31 

4. Lapse of offer 32 

5. Acceptance must be without quali- 

fications 33 

6. Binding when communicated 34 

7. How acceptance should be made. . 34 

8. Three ways of showing acceptance 35 

A. Words 35 

B. Conduct 36 

C. Performance 36 

(a) Gratuitous act not ac- 
ceptance 37 

9. Terms must be certain 37 

10. Rewards 38 

A. Revocationof offer of reward. 39 



CONTENTS xi 

PAGE 

B. When may officer recover 

reward? 39 

(b) Reality of consent 40 

1. Did the parties agree? 40 

2. Difference between: 

A. Mistake 40 

(a) Of law 41 

(b) Of fact .. 41 

(c) Signing without reading. 41 

B. Fraud 42 

C. Misrepresentation 43 

(a) Explanation 43 

1. Matters of opinion. . . 45 

2. Puffing 46 

D. Undue influence 47 

(a) The fiduciary relation ... 48 

E. Duress 50 

(a) Contracts made under 

duress are voidable . , . 50 

1. The duress may be 

against a relati ve . . 50 

2. Duress by imprison- 

ment . 50 

F. Duty of plaintiff 51 

C. Legal subject matter 51 

(a) Explanation 51 

(b) Courts leave guilty parties where they 

find them 52 

(c) Contracts with the enemy 53 

(d) Agreements to hinder justice 53 

(e) Combinations to raise prices 54 

(f ) Hindering bidding at public sale 54 

(g) Usury 55 

(h) Influencing legislation 55 

(i) Agreements in restraint of trade 55 

D. Consideration 56 

(a) Defined 56 

(b) Kinds 56 

1. Good 57 

2. Valuable 58 

(c) Consideration necessary 58 



xii CONTENTS 

PAGE 

(d) A seal imports consideration 59 

(e) Negotiable instruments import consid- 

eration 59 

(f) Forbearance is sufficient consideration 60 

(g) Compromises of doubtful claims 60 

(h) Courts do not look into the sufficiency of 

consideration 61 

(i) Doing what one is legally obliged to do 61 

(j) Past consideration is no consideration 62 

5> Writing required 62 

A. Explanation 62 

B. Fourth Section of Statute of Frauds 63 

(a) If the contract is performed it does not 

apply 64 

(b) Who must sign? 64 

(c) Signature 64 

(d) Special promises of executors and ad- 

ministrators 65 

(e) Debts, defaults and miscarriages of 

other parties 65 

(f) Consideration of marriage . 65 

(g) Contracts involving real property 66 

(h) Contracts not to be performed within 

one year 66 

C. Seventeenth Section of Statute of Frauds . . 67 

6. Contracts are binding 67 

A. Importance 67 

7. Remedies 69 

A. Two remedies 69 

8. Discharge of contract 70 

A. Ways 70 

(a) By performance 70 

1. Legal tender 70 

2. Negotiable instruments 71 

(b) By agreement. 72 

(c) By breach 72 

(d) By operation of law 73 

1. Bankruptcy 73 

2. Merger 73 

3. Alteration of written contract 73 

9. Loss of right of action 73 



CONTENTS xiii 

PAGE 

A. How it may be lost 73 

(a) By release 74 

(b) By accord and satisfaction 74 

(e) By judgment 74 

(d) By the Statute of Limitations 74 

10. Transfer of contracts 75 

A. Assignment 75 

IV\ Agency 83 

1. Defined 83 

2. Relation is a fiduciary one 83 

3. Classes of agents 84 

4. Within the apparent scope of authority 84 

5. Creation of agency 84 

A. Agreement 85 

(a) When is writing required? 85 

B. Ratification 85 

(a) Methods of ratifying 86 

1. By conduct 86 

2. By accepting benefits 87 

3. By silence 87 

C. Operation of law 88 

6. Delegation of authority 88 

A. General rule 88 

B. Exceptions 88 

7. ObHgations 89 

A. Agent to principal 89 

(a) Care 89 

(b) Obedience 89 

(c) Account 90 

(d) Loyalty 90 

B. Agent to third parties 91 

(a) When he binds himself 91 

C. Principal to agent 92 

(a) Compensation 92 

D. Principal to third parties 92 

(a) Liability for agent's contracts 92 

(b) Liability for agent's wrongs 93 

(c) Liability for negligence 93 

E. Third parties to agents 94 

F. Third parties to principals 94 

(a) In contract 94 



xiv CONTENTS 

PAGE 

(b) For wrongs 94 

8. Termination 95 

A. When may agency be terminated? 95 

B. Ways 95 

(a) Acts of the parties 95 

(b) Operation of law 96 

V. Sales of Personal Property 100 

1. Difference between personal and real prop- 

erty 100 

2. Difference between gifts, etc 100 

3. Gambling contracts are void 101 

4. Statute of Frauds 101 

5. Fixtures 102 

A. Defined 102 

B. Kinds of annexation 102 

C. Removal of fixtures 103 

(a) Tests used to determine 104 

1. Intention of the parties 104 

2. Actual annexation 104 

3. Use or purpose 105 

(b) When may they be removed? 105 

6. Caveat Emptor 105 

7. Conditions 106 

A. Effect of breach 106 

8. Warranties 107 

A. Effect of breach 107 

B. Express warranties 107 

C. Implied warranties 108 

9. Title 109 

A. Of a seller 109 

B. Of a finder 110 

C. Of a thief 110 

D. By an agent Ill 

E. When does title pass? Ill 

(a) Intention Ill 

(b) Separation of goods 112 

10. Conditional sales : 112 

A. Installment sales 112 

B. Sales upon approval 113 

C. Difference between conditional sales and 

mortgages 114 



CONTENTS XV 

PAGE 

11. Remedies of seller for breach of contract 114 

A. Explanation 114 

B. Stoppage in transit 114 

C. For refusal to fulfill 114 

D. Amount of damages 115 

12. Rernedies of the purchaser 115 

A. For failure to dehver 115 

VI. Bailments 118 

1. Defined and explained 118 

2. Parties to a bailment 119 

3. Title 119 

4. Classes of bailments 119 

A. For bailor's sole benefit 119 

(a) Gratuitous 119 

(b) Responsibility 119 

(c) Termination 120 

B. For mutual benefit 120 

(a) Recompense 120 

(b) What they include 120 

1. Classes of ordinary bailments 120 

A. To take care of chattel 121 

B. To work on chattel 121 

C. To transport chattel 121 

D. Bailment for security 121 

(c) Lien 122 

(d) Termination 122 

C. For bailee's sole benefit 123 

(a) Gratuitous 123 

(b) Termination 123 

D. Care required in ordinary bailments 124 

(a) In general 124 

(b) Contracts changing liability 124 

(c) Definitions of degrees of care 124 

(d) Examples showing care required 125 

E. Exceptional bailments 127 

(a) Kinds 127 

1. Postmasters 127 

A. Importance of subject 127 

2. Innkeepers 128 

A. Why treated under bailments? 128 

B. Who is an innkeeper? 128 



xvi CONTENTS 

PAGE 

(a) Difference between board- 
ing house keeper and 

innkeeper 129 

C. Who is a guest? 129 

D. Whom innkeeper must receive 129 

E. LiabiHty 129 

F. Lien 131 

3. Common carriers 132 

A. Defined and explained 132 

B. Who are common carriers?... 132 

C. What goods must the carrier 

receive? 133 

D. Carrier almost an insurer 135 

(a) Act of God 135 

(b) Act of public enemy 136 

(c) Act of shipper 136 

(d) Act of public authority .. . 137 

(e) Loss because of nature of 

goods 137 

E. When Hability begins 138 

F. Liability under special con- 

tracts 139 

G. DeHvery 140 

(a) Must be to right person . . 142 

4. Carriers of passengers 143 

A. Why treated under bailments? 143 

B. Who is a carrier of passengers? 143 

C. Who is a passenger? 143 

D. Carriers must receive passengers 145 

E. Tickets 146 

F. Liability 147 

G. Baggage 149 

(a) Defined 149 

(b) Carrier must transport 

baggage 150 

1. Liability of carrier. ... 150 

VII. Negotiable Instruments 157 

1. Defined and explained 157 

2. The essentials 158 

A. An unconditional written promise 158 

B. Signed 159 



CONTENTS xvii 

PAGE 

C. Negotiable in form 159 

D. To pay a certain amount 159 

E. Absolutely 160 

F. At a certain time 160 

G. To the order of a certain party or bearer . . 161 

3. Kinds of negotiable instruments 162 

A. Bills of exchange 162 

(a) Defined 162 

(b) Kinds 162 

(c) Acceptance 163 

B. Checks 164 

(a) Defined and explained 164 

(b) Certified checks 165 

C. Promissory notes 166 

(a) Defined and explained 166 

4. Negotiation 168 

A. Indorsement 168 

(a) Kinds 169 

5. When notes are joint and several 170 

6. Contracts of the different parties 170 

A. The contract of the maker 170 

B. The contract of the drawer 171 

C. The contract of an indorser 171 

D. Protest ... 172 

E. Notice of dishonor 172 

F. The holder's rights 173 

(a) A holder in due course 173 

1. An instrument complete 174 

2. Before it is overdue 174 

3. In good faith 174 

4. For fair value 174 

(b) How negotiable instruments are dis- 

charged 176 

VIII. Partnerships 180 

1. Defined 180 

2. How formed 180 

3. Why form partnerships? 181 

4. Agreements to form 182 

5. Must be for lawful purpose 182 

6. Firm name 183 

•7. Kinds of partnerships. 183 



xviii CONTENTS 

PAGE 

8. Who may be a partner? 183 

9. Agency in partnerships 184 

10. Duties, rights and powers of partners 184 

A. Good faith 184 

B. Account 185 

C. Extra compensation 185 

D. Powers of the partners 185 

E. LiabiHty of the partners 186 

F. Dissolution 186 

(a) By act of the parties 186 

(b) By operation of law 188 

(c) By judicial proceedings. 188 

(d) Notice of dissolution 190 

1. Why given 190 

2. W^ays of giving 190 

3. Effect of not giving 191 

11. Limited partnerships 191 

A. How organized 191 

12. Joint stock companies 192 

A. Resemble partnerships 192 

IX. Corporations 194 

1. Defined 194 

2. History 194 

3. Need of corporations 195 

4. Kinds , 195 

A. Pubhc 195 

B. Quasi-public 195 

C. Private 196 

5. Kinds of private corporations 196 

A. Non-stock corporations 196 

B. Stock corporations 197 

(a) Membership 197 

(b) Kinds of stock 197 

(c) Powers 197 

(d) Ultra vires acts 198 

(e) Attributes of a corporation 199 

1. Power of perpetual succession 199 

2. A special name 199 

3. Power to hold property 200 



CONTENTS xix 

PAGE 

4. The right to a limited habihty for 

its members 201 

- 5. The right to sue and be sued in cor- 
porate name 201 

6. The right to make by-laws 202 

7. The right to a corporate seal 202 

(f) Management . 203 

1. Rights of stockholders 203 

A. Right to examine books 204 

B. Majority rules 204 

C. Dividends 205 

(g) Dissolution 205 

1. How it may be dissolved 205 

A. By time limit . . 205 

B. By legislature repealing charter 205 

C. By forfeiture 206 

D. By surrender 207 

E. By courts of equity. . 207 

Real Property 209 

1. Property 209 

2. Is the title good? 209 

A. Torrens system 210 

3. Transfer of real estate 210 

A. Methods 210 

B. Definitions 211 

C. Requisites of deeds 211 

(a) Names of parties 212 

(b) Operative words 212 

(c) Description 212 

(d) Signing 213 

(e) Seal 213 

(f) Delivery . 214 

D. Acknowledgment 214 

E. Filing of deeds 214 

F. Date 215 

G. Quit-claim deeds 215 

H. Warranty deeds 215 

(a) Lawful seizen and right to convey 216 

(b) No incumbrances 216 

(c) Quiet enjoyment and defense 217 



XX CONTENTS 

PAGE 

4. Estates 217 

A. Definition and kinds 217 

(a) Fee simple 217 

1. Eminent domain 218 

(b) For life 219 

1. Defined 219 

2. Emblements 219 

3. Waste 220 

4. Insurance and repair 220 

(c) For years 220 

1. In general 220 

2. Leases 221 

A. Illegal leases 221 

B. Covenants 222 

3. Recovering possession 223 

(d) The .estate by marriage 223 

1. Dower 223 

A. How it may be lost 224 

(e) The right of homestead 225 

1. Homestead estates 225 

2. How they may be lost 225 

5. Mortgages 227 

A. Definition and explanation 227 

B. Form 227 

C. Redemption 228 

D. Trust deeds 228 

Vocabulary 233 

Table of Cases 247 

Index 257 



COMMERCIAL LAW 



CHAPTER I 

THE BASIS OF LAW 

Definition. Law is a rule of action. The growth of 
trees is governed by certain laws. The law of gravity is 
an example of one of the laws of nature. Countless ex- 
amples might be given to illustrate laws. However, law in 
the sense we shall use it means a rule of action pre- 
scribed by some superior authority (such as the United 
States Government or the State of Illinois) by which men 
are governed and which they must obey. 

Kinds of law. There are two kinds of law: 

1. Criminal Law, 

2. Civil Law. 

Criminal Law. Criminal law is the law that deals with 
the punishment of crimes. A crime is an act that affects 
the public and is of so much public importance that the 
law punishes it. J. R. Smith without just cause kills 
Howard Parks. Should the law fail to punish Smith, the 
public may expect recurrences of the offense with greater 
frequency. Self-protection demands that the man be 
punished. 

Civil Law. The civil law has to do with private rights 
and deals for the most part with private property and pri- 
vate rights. Harold Johnson sold his bicycle to George 
McDonald, who refused to pay him. Johnson can recover 
from McDonald in a civil action. All laws that do not deal 
with crimes are civil laws; ('' civil law '^ as here used does 
not mean the Civil Law of Rome, see p. 7). 

3 



4 THE BASIS OF LAW 

Commercial Law. Commercial Law is merely a branch 
of civil law, and has little to do with Criminal Law. 
Commercial Law is that law which concerns individuals 
in their business dealings. 

What law is supreme. The Constitution of the United 
States and the laws and treaties made by Congress 
under the authority of the Constitution constitute the 
supreme law of the land. The people of the States 
agreed to unite as one nation on condition that this 
particular constitution be adopted and so it is binding 
on all the people. 

In case there is a conflict between a law of the United 
States and a treaty made by the Senate, the one last in 
point of time will control. {Doe vs. BradeUj 16 How. 635, 
Foster vs, Neilson, 2 Pet. 253, 314.) 

The laws passed by Congress are next in order of 
supremacy. These laws must conform to the Constitution 
of the United States or they are not valid. 

The Constitution of Illinois is the fundamental law of 
this State. We are bound by that in so far as it is not in 
conflict with the Constitution of the United States. The 
people of the State are at liberty to change this basic law 
at any time by going through certain formalities. In 1818 
when the State was admitted into the Union, we had our 
first Constitution. In 1848 the second Constitution was 
adopted to take its place. That one remained in effect 
until 1870 when our present Constitution was adopted. 
In 1922 a Constitution Convention drew up a new 
Constitution. It will be submitted to the people of 
Illinois to vote upon in a short time. 

In Illinois the Common Law of England (with a few 
exceptions) so far as it is applicable and of a general nature, 
and all statutes and acts of the British Parliament made 
in aid of, and to supply the defects of the Common Law 



THE BASIS OF LAW 5 

prior to the year 1607 are considered in full force until 
repealed by the State Legislature. 

By ^^Common Law'^ is meant that system of legal 
principles that grew out of the customs and usages com- 
mon to all of England. 

Whenever the Legislature at Springfield passes a law in 
conflict with the Common Law, the Common Law on that 
particular subject is void. 

From this explanation it will be seen that the laws that 
govern us in the order of their importance are: 

1. Constitution of the United States, 

2. Treaties, 

3. Laws passed by Congress, 

4. Constitution of Illinois, 

5. Statute Law of Illinois, 

6. Common Law. 

Powers. Both the National Government and State 
Governments are supreme in their own spheres, and in 
exercising their powers the States are independent just as 
the National Government is independent in its sphere. 
Each is sovereign within its limitations. 

It may be, however, that both the States and the 
National Government exercise the same power. The mere 
fact that the National Government possesses a power 
does not mean that the States cannot exercise the same 
power. Nor should it be understood that because the 
States have a power, the National Government does not 
have the same power. The United States Government 
taxes the people. So does the State of Illinois. This illus- 
trates the use of a power by both Governments. The right 
of both the National Government and the State Govern- 
ment to organize the militia is another example of the 
same principle. 



6 THE BASIS OF LAW 

State rights vs. national rights. The difference between 
the powers that the States have and the National Govern- 
ment has is this : 

The States have all those rights that they did not ex- 
pressly give to the National Government. 

The National Government has only those rights which 
the States gave to it. 

When the history of the country is recalled, this will 
appear more clearly. The States were suspicious of the 
powers of the National Government. There were a great 
many able men in the colonies who sincerely doubted the 
purposes of the National Government. The opposition 
was not satisfied until all the powers to be exercised by the 
United States were expressly stated. 

The National Government cannot invade the jurisdic- 
tion of the States; neither can the States invade the juris- 
diction of the National Government. To illustrate, Con- 
gress cannot regulate the commerce in the State of Illinois 
(though it can regulate inter-state commerce) because 
each State has the power to regulate commerce within its 
own boundaries. But no State can make a treaty. That 
power is an exclusive power of the Central Government. 

Divisions of onr government. When governments were 
first set up, kings and other rulers were the judges and 
lawmakers as well. As governments developed, we finally 
evolved a division of powers so that today in this country 
we have three branches of Government: 

1. The Executive branch, 

2. The Legislative branch, 

3. The Judicial branch. 

The President of the United States represents the Execu- 
tive branch of the National Government and the Governor 
of Ilhnois the Executive branch of the State Government. 



THE BASIS OF LAW 7 

The Legislative branch makes the laws. Congress makes 
the laws for the Nation at Washington. The State Legis- 
lature, which meets at Springfield, makes the laws for 
Illinois. 

The National Government and the State of Illinois have 
separate systems of courts to explain and enforce the laws. 
This is the Judicial branch. 

Growth of Common Law Courts. In the early days of 
barbarism in England there was no law, no order and no 
court. Physical combat settled disputes. Might — not 
right — ^ruled. Civilization, law, and order grew up to- 
gether. Courts finally were established. By the beginning 
of the reign of Henry the Second, in the year 1154, the 
Civil Law of Rome had become established in France and 
other continental countries. King Henry believed that 
the laws governing England should be English and by his 
efforts the customs and usages common to all of England 
became the law of the land and known as the Common 
Law. 

The Common Law system had many Courts. There 
were three Supreme Courts: 

1. The King's Bench (or Queen's Bench if a Queen was 
ruling), which tried criminal cases. The King never sat as 
a judge but the judge represented the King or Kingdom. 

2. The Exchequer Court, which tried revenue cases. 

3. The Court of Common Pleas, which tried all other 
cases. 

These Courts remained practically unchanged from 
early English history until the close of the nineteenth 
century. 

Defects of Common Law Courts. It is hardly possible for 
us to appreciate the great progress made by the Common 
Law of England in comparison with the Civil Law of Rome. 



8 THE BASIS OF LAW 

It -was better calculated to secure justice and was a more 
enlightened system. Trial by jury affords one example of 
its worth. 

But with all its advantages there were some faults. 
Prominent among them were two. In many cases the 
Common Law Courts were : 

1. Too technical, and 

2. Too slow. 

Often at that time too much attention was paid to the 
forms of the law and too little attention to the right or 
wrong involved in the lawsuit — a condition not entirely 
removed from our own times. 

Because of these two defects there grew up : 

1. Law Merchant Courts, and 

2. Chancery Courts. 

Law Merchant Courts. Judges selected by the mer- 
chants and traders settled many disputes that arose in 
business dealings and finally Law Merchant Courts grew 
up with laws of their own. There were two advantages of 
these Courts. They were: 

1. Informal, and 

2. Speedy. 

But they had one disadvantage. Their decisions were 
not enforceable. If one party refused to accept the de- 
cision given, no one could compel him to abide by it. In 
time their laws became a part of the Common Law, being 
absorbed by it. Our Negotiable Instrument Law is the 
product of the Law Merchant. 

Chancery Courts. Oftentimes one, or both, of the parties 
who had a suit in the Common Law Courts would not be 
satisfied with the verdict. Many would appeal to the King 
for justice. They appealed to the King because, according 



THE BASIS OF LAW 9 

to the ancient theory, he was the fountain of all justice and 
wisdom. He heard some cases but refused to hear others. 

Until Edward the Third came to the throne, the dissatis- 
fied parties appealed to the King directly. He became too 
busy to hear them and turned the cases over to an officer 
known as, '' The Chancellor'^ or '' The Master of the Rolls, ' ' 
who was ^'The Keeper of the King's Conscience. '' When 
^'The Chancellor" decided the case the verdict was given 
in the name of the King. During the reign of Edward, 
however, Parliament ordered these causes appealed di- 
rectly to ^^The Chancellor" and Chancery Courts became 
a distinct system. 

Difiference between Law and Chancery Courts. In general 
it may be stated that Courts of Law looked more to the 
forms while the Courts of Chancery, or Equity, look more 
to the right or wrong of the question in dispute. In Illinois 
today the differences are not so well defined as they were 
in England and we have the same judges sitting in both 
the Common Law and Equity cases at the same term of 
court. However, they are still distinct tribunals. 

Influence of English laws. Our country was largely 
dominated by Englishmen in language, customs, and ideals. 
This is clearly shown by the fact that all the States of the 
Union but one (Louisiana which took the Civil Law) 
adopted the English Common Law as the basis of their 
laws. 

In 1818 when Illinois became a State it adopted (with a 
few exceptions) all the Common Law of a general (not 
local) nature that was in effect in England in 1607, as the 
basis of its laws, declaring it to be the law unless changed 
by the Legislature. 

Following precedents. Courts follow precedents in most 
instances. Whether they are followed at the expense of 
justice sometimes is not the question here. If the decisions 



10 THE BASIS OF LAW 

are reasonable and just they should be followed. If absurd 
or unjust they should not be. 

Judge Wanamaker (m Columbus Packing Co. vs. State, 
126 Northeastern Reporter, 291) has given a good state- 
ment of the value of precedents. 

''' Precedents are worth just as much, and no more, than 
they weigh in reason and justice. They are worth just as 
much, and no more, than their recognition of fundamental 
facts and their natural justice to all parties concerned in 
the particular case. If it were not so, precedent would be 
the natural and necessary enemy of all progress, and while 
the social, industrial, and commercial conditions of any 
country were in a state of natural and necessary growth 
and evolution, the fixed, strict law of unchanging precedent 
would, like a straight-jacket, be an entire misfit, wholly 
unadaptable to the conditions and the situation in any 
modern case at bar. ... One of the greatest cases 
ever tried in America was the famous case of the Colo- 
nists against Great Britain, in which the opinion of the 
court, the Congress of the United States, was drawn by 
Thomas Jefferson in 1776. There was no precedent, at 
least Jefferson cited none, to sustain the judgment of that 
court. . . . Jefferson may have been short on pre- 
cedent in writing that opinion, but he was long on princi- 
ple; a principle that has becom^e the very foundation of 
our American system of government.'' 

QUESTIONS ON THE BASIS OF LAW 

1. Define law. 

2. What is criminal law? civil law? 

3. What branch of the law is commercial law? 

4. What is meant by the ^'Common Law"? 

5. If the Legislature passes a law in conflict with the Com- 

mon Law, which is void? 



THE BASIS OF LAW 11 

6. Name the laws that govern us in the order of their suprem- 

acy. 

7. What rights have the States? 

8. What ones has the National Government? 

9. Name the three departments of our Government. 

10. Who was the King who determined that the Civil Law of 

Rome should not be the law of England? ' 

11. Name the three Supreme Courts as they formerly existed 

under the Common Law. 

12. What cases did each hear? 

13. Trace the growth of the Law Merchant Courts. 

14. Why were they absorbed by the Common Law Courts? 

15. Trace the growth of the Chancery Courts. 

16. What, in general, is the difference between Common Law 

and Chancery? 

17. Illustrate the influence of English laws on this country. 

18. Should precedents be followed? 



CHAPTER II 

COURTS 

The object of courts. It is the duty of the Legislative 
branches of the Governments to make the laws but it would 
do no good to make the laws unless a way was provided 
for their enforcement. There are a great many legal 
questions to be decided. It is the duty of the Courts to 
pass upon the Constitutionality of the Statutes that are 
enacted as well as to decide other disputes. For these 
purposes, we have the Judicial branch of the Government. 

The United States Government has its system of Courts, 
generally known as the Federal Courts. Each State has 
its own system. These Courts are distinct and separate 
and are not conflicting. 

Jurisdiction. Each Court has the right to try only cer- 
tain cases. These cases are said to be within their juris- 
diction. Those that it has no authority to try are said to 
be outside its jurisdiction. 

The Constitution provides that the judicial power of the 
Federal Courts shall extend to all cases, in law and equity, 
arising : 

1. Under this Constitution (of United States), 

2. The laws of the United States, 

3. And treaties, 

4. To all cases affecting ambassadors, other public 

ministers, and consuls, 

5. To all cases of admiralty, 

6. To controversies to which the United States shall be 

a party, 

12 



COURTS 13 

7. Between citizens of different States, 

8. Or different countries, etc. {Const. Art, 3, Sec, 2.) 

Since the States retained all the powers that were not 
expressly granted away, it will be seen that they have 
jurisdiction in all cases except where they gave the right 
to the Federal Government. 

A Justice of the Peace Court has no authority to try 
murder cases. That right belongs to the higher Courts. 

United States Courts have no authority to try violators 
of a village ordinance of a State. This belongs to the State 
Courts. 

It was held that the Courts of Texas had no right to 
punish Mexican soldiers who killed a United States soldier 
incidental to a battle, in Texas, between Mexico and the 
United States. That right belongs to the Federal Courts. 

The Military Courts of the United States do not have 
authority to try civilians for their crimes. That right be- 
longs to the Civil Courts. 

The jurisdiction may be said to be either: 

1. Exclusive, or 

2. Concurrent. 

Courts of Exclusive Jurisdiction of any matter are the 
only courts that can hear these particular questions. 

A court that has concurrent jurisdiction is one that has 
a right or authority which is shared equally by some other 
court to try certain cases. 

Courts are often classified as those of: 

1. Original jurisdiction, and 

2. Appellate jurisdiction. 

Courts that hear cases that are tried for the first time are 
said to have original jurisdiction. (The word original 
means first in order.) 



14 COURTS 

To appeal means to transfer or to refer points in dispute 
to a superior court and judge. These courts to whom the 
questions are referred are called Appellate Courts. 

FEDERAL COURTS 

The judicial power of the United States Government is 
vested in the Supreme Court and such inferior Courts as 
Congress may from time to time think are needed. At the 
present time, we have the: 

1. District Courts, 

2. Circuit Courts of Appeals, 

3. Supreme Court. 

United States District Courts. Each District Court of 
the United States has original jurisdiction only. It is pre- 
sided over by a District Judge. As the Circuit Court has 
been abolished by Congress the District Court now hears 
those cases that it formerly heard as well as those that 
the Circuit Court formerly heard. The Circuit Court 
was abolished to simplify the Court system. 

United States Circuit Courts of Appeals. The Circuit 
Courts of Appeals have no original jurisdiction. They 
hear cases on appeal only. In cases of lesser importance 
their decisions are final. In cases of more importance the 
final decision rests with the Supreme Court of the United 
States. 

The United States Supreme Court. The sessions of the 
Supreme Court are held in Washington, D. C. The Court 
consists of nine judges, a Chief Justice and eight Associate 
Justices. 

This Court has original jurisdiction in cases affecting 
ambassadors, other public ministers, and consuls, and those * 
in which a State shall be a party. In all other important 



COURTS 15 

cases it has appellate jurisdiction — the less important be- 
ing settled in the Circuit Court of Appeals. 

Federal Court officers. The various officers of the 
Federal Courts aie the Judges, Attorney-General, District 
Attorneys, Referees, Marshals and Clerks. 

The judges of all the United States Courts are appointed 
by the President with the advice and consent of the Senate. 
They hold office for life, during good behavior. They can 
be removed only by impeachment, when they have violated 
their trust. In order that they may be free from all politi- 
cal interference, the Constitution declares that their com- 
pensation shall not be diminished during their continuance 
in office. 

The principal duties of the Attorney-General of the 
United States are to prosecute suits in the United States 
Supreme Court and to give advice to the President and 
Cabinet. He is appointed by the President. 

District-Attorneys are appointed to prosecute offenses 
coming under the authority of the United States and to 
prosecute all civil actions within their own districts in 
which the United States is concerned. 

Referees are appointed in the United States District 
Courts by the Federal Judges to aid the latter with 
matters of detail that arise. The relation existing be- 
tween the district judge and the referee may be com- 
pared in many respects to the relation existing between 
the Circuit Judges of Illinois and the Masters-in- 
Chancery. 

Marshals are appointed by the President with the 
consent of the Senate. In general their duties for their 
districts may be compared to the duties of the Sheriffs in 
Illinois in their counties. 

Clerks are appointed by the courts. Their duties consist 
principally of keeping the records of the courts. 



16 



COURTS 



Courts of Illinois. Because of the fact that the needs of 
Chicago differ materially from those of the rest of the 
State we find that the court system for that city differs 
from the system of courts in other parts of the State. 

The following diagram will illustrate the differences 
between the Cook County Courts and the Downstate 
Courts : 



Downstate Courts 



City Courts (in 
cities whose pop- 
ulation is over 
3,000, the same as 
the Municipal 
Courts) 



Cook County 
Courts 



Municipal Courts 



Courts that are the 
same in Cook County 
and Downstate 

Justice of the Peace 
and Police Magis- 
trate Courts 



3. 






Probate Courts in all 
Counties whose pop- 
ulation is over 70,- 
000 


4. 






County Courts (in 
smaller Counties 
they attend to Pro- 
bate matters) 


5. 


Circuit Courts 


Superior Courts and 






(hear the same 


Criminal Courts 






cases as the Supe- 








rior and Criminal 








Courts) 






6. 






Appellate Courts 


7. 






Supreme Court 



The Jurisdiction involved in these different courts is too 
complicated to be given here, only a few things will be 
noted. 



COURTS 17 

Justices of the Peace have Jurisdiction in civil matters that 
involve three hundred dollars or less. They have Original Jurisdic- 
tion in misdemeanors, punishable by fine only, if the fine does not 
exceed three hundred dollars. 

The Municipal Court of Chicago was created by the State Legisla- 
ture to attend to the great volume of business there. 

The City Courts have concurrent Jurisdiction with the Circuit 
Courts within the city, in actions arising in the same city or appealed 
from the Justice of the Peace in the same city. Any city over three 
thousand may have this court. 

We have County Courts in all the counties in the State. In 
counties less than 70,000 the county courts attend to the probate 
matters. 

Probate Courts have to do with the settlement of estates. In 
counties of over 70,000 they are separate from the County Court. 

There are seventeen Circuit Court Districts in Illinois. Circuit 
Courts, in general, attend to civil actions involving greater amounts 
of money and more serious criminal offenses. 

The Superior and Criminal Courts of Cook County have juris- 
diction of the same class of cases as the Circuit Courts of the other 
counties of Illinois. 

There are four Appellate Court districts in Illinois. The Appellate 
Courts do not have any original Jurisdiction but merely review cases 
tried in the lower courts. The judgments of this court are final in 
matters of lesser importance. 

The Supreme Court of Illinois is composed of seven judges, 
elected from seven districts in the State. Its decisions are final. 

A State cannot be sued without its own consent. Since there are 
many just claims against the State, it will be seen that some method 
should be provided whereby creditors may receive what is due them. 
For this purpose the State of Illinois has formed what is called the 
Court of Claims, composed of three judges. 

State Court officers. The principal officers in the State 
Courts are the Judges, the Attorney-General, the State's 
Attorneys, the Sheriffs, and the Clerks. 

The Judges of the State Courts are elected by direct 
vote of the people for a definite term. They can be re 
moved for illegal actions. 



18 COURTS 

The Attorney-General of the State represents it in much 
the same way as the United States Attorney-General 
represents the Federal Government. He is elected by 
the people, while the United States Attorney-General is 
appointed. 

A State's Attorney is elected for each County to prose- 
cute violators of the law. 

A Master-in-Chancery is appointed by the Circuit Judge 
to assist him in his chancery cases. 

Sheriffs are elected by Counties to enforce the law. 

Clerks are elected for each Court of Record. 



QUESTIONS ON COURTS 

1. Why are Courts established? 

2. What is meant by jurisdiction? 

3. Harvey, a United States soldier, was accused of being absent 

from camp without official leave. His camp was in Illinois. 
Have the State Courts jurisdiction to learn whether he was 
guilty of leaving camp? Give reason for your answer. 

4. Explain the difference between exclusive and concurrent juris- 

diction. 

5. What is meant by original and appellate jurisdiction? 

6. Name the three United States Courts. 

7. Write out a list of the officers of the Federal Courts. 

8. Name the Illinois Courts. 

9. Write out a list of the officers of the State Courts. 



CHAPTER III 

CONTRACTS 

Contracts defined. A contract is an agreement between 
two or more competent parties, to do or not to do some 
particular thing. 

Classification of contracts. Contracts are either (1) 
executed or (2) executory. 

An executed contract is one whose terms have been 
carried out by the parties. There must be nothing left to 
be done if the contract is in this classification. 

An executory contract is one whose terms have not 
been fully carried out. There remains something to be 
done. 

An agreement that has been performed by one of the 
parties but not by the other, is said to be executed by the 
first part}^ and executory as to the second. ^ 

Express and implied contracts. Contracts may be 
divided into (1) express and (2) implied contracts. 

An express contract is one whose terms are expressed, 
either orally or in writing, b}^ the parties. 

An implied contract is one whose terms are not expressed 
by the parties but are implied by law. You ask for a rail- 
road ticket from Hoopeston, Illinois, to Baltimore, Mary- 
land. The ticket agent gives it to you. Reason and justice 
indicate you should pay for it and the law will imply that 
you intended to pay for it and that the agent expected to 
receive pay for it. You go into a restaurant and order a 
meal. Nothing is said about paying, but the law compels a 
payment upon an implied contract. 

19 



20 CONTRACTS 

Written and unwritten contracts. It is a common error 
to believe that a contract cannot be enforced unless it is in 
writing. Tlie general rule is otherwise. In most cases it is 
not necessary that the contract be written before there 
can be a recovery. 

It should be kept in mind, however, that it is better to 
have contracts written. In a short time the parties are 
likely to forget many of the details, so, frequently end- 
less disputes will arise if the contract is not in writing. 

If the contract is written it is very important that 
someone familiar with the legal effect of contracts should 
draw it. The law provides that oral testimony cannot be 
given to change the terms of a written contract. Even if 
the terms are not as written that cannot generally be 
shown in court. 

Formal and simple contracts. Formal contracts are 
those contracts under seal. They are called formal con- 
tracts because in former times the affixing of the seal was 
attended with some formality. 

As is explained later (see page 85), certain contracts 
must be under seal to be valid. 

Originally the reason for having seals on contracts was 
that the people of England, even the kings and nobles, were 
unable to sign their names and the seals of the people were 
used to show the contract was the act of the parties. 

A seal may consist of an impression in wax or other 
tenacious substance, capable of receiving an impression. 
Or the letters '^L. S.'^ or the word ^^Seal'^ or in fact any- 
thing the parties may wish to consider a seal is sufficient. 

In The People of the State of Illinois vs. Ford, 2M 111. 319, the 
court said, ''The requirement of a seal in the execution of documents 
by individuals has become a mere formality. It means nothing. 
Private seals no longer exist as a means of execution of specialties, 
for even an individual scrawl is not required. In most deeds the word 



CONTRACTS 21 

'sear is printed on the blank form which is used and the grantor 
does not know whether he has used a seal or not. While the courts 
of law in this State cannot disregard the legal quality of the sealed 
instrument, courts of equity relieve parties from the difficulties of 
the rigid rules of the common law to such instruments." 

The above case should be read ^^The People of the State of Illinois 
against Ford, two hundred ninety-fourth, Illinois, three hundred nine- 
teen." ^^vs." is the abbreviation for versus and is read ^'against." 
The first number, in this case 294, has reference to the volume of the 
Supreme Court reports and the last number, 319, refers to the page 
in the volume. The reports are generally given the name of the 
State but often the name of the court reporter is used. In Illinois 
the reports at first were named after the reporters who reported 
the cases. These reporters were Breese, Scammon, Oilman and 
Peck. The student should be familiar enough with these names to 
recognize the fact that they indicate Illinois reports. The other 
reports are merely written ^'111." 

Simple contracts, however, are those which do not have 
a seal. Most contracts do not require a seal. 

Three classes of contracts. Contracts are generally 
classed as: 

1. Valid, 

2. Voidable, 

3. Void. 

Valid contracts. Valid contracts are those binding on 
both of the parties. 

Voidable contracts. Voidable contracts are those con- 
tracts which for some reason are binding on only one of the 
parties and binding or not binding on the other, at the 
option of the latter. Anderson, an adult, sells to Wilcox, 
an infant, a machine which the latter does not need. The 
contract is binding on Anderson, but Wilcox has his choice 
as to whether or not he shall be bound. 

Void contracts. Strictly speaking there is no such thing 
as a void contract. When we use the term, void contract, 



22 CONTRACTS 

we really mean a void agreement. A void contract is 
a contract binding on no one. A contract may be void 
for any one of a number of reasons, to illustrate: 
should the parties fail to comply with any of the essen- 
tial conditions of the contract it is void, or should the 
parties be incompetent or should the law be violated it 
is void. 

Essentials of a valid contract. In order to have a valid 
contract there must be : 

1. Competent parties, 

2. Offer and Acceptance, 

3. Legal Subject Matter, 

4. Consideration. 

Writing is necessary in cases that come under the 
Fourth and Seventeenth Sections of the Statute of Frauds 
(see p. 62). 

COMPETENT PARTIES 

Number of parties necessary. In order to have a valid 
contract, it is necessary to have two or more competent 
parties. 

Gent vs. The Instance Co., 107 111. 652, was an action on the 
plaintiff's application for fire insurance to recover for the loss of 
his factory by fire. The fire occurred after the plaintiff had applied 
for his insurance and had given his promissory note for the premium, 
but before the organization of the insurance company had been 
completed and before it had obtained the certificate of the State 
Auditor that it was a lawful corporation. The court held that there 
was no contract for insurance and that the company was not liable, 
as it had no corporate existence at the time the plaintiff applied for 
his insurance. 

The company not having lawful existence Gent was the 
only contracting party, hence there was no contract. 



CONTRACTS 23 

What parties are competent? It may be said that all 
parties are competent to contract. There are some excep- 
tions, the most important of which are : 

1. Infants, 

2. Insane persons, 

3. Drunken persons. 

Under the Common Law,* married women could not 
make contracts. In most States married women a.re compe- 
tent to make all contracts that unmarried women can 
make. In Illinois there is one exception, however, since 
they cannot form partnerships without their husbands' 
consent. 

Until the parties are old enough to have some idea as to 
what is best for their own good it is necessary for the law to 
protect them. There is no exact time when it can be said 
that all are able to carry on their own business affairs. An 
arbitrary time has been set. In Illinois the age is 21 for 
men and 18 for women. 

CONTRACTS OF INFANTS 

Voidable contracts. The rule is that all contracts of 
infants are voidable. However, there are two exceptions: 

1. An infant's power of attorney under seal is void, and 

2. His contracts for necessaries are valid. 

The infant's voidable contract is binding upon the adult 
with whom he contracts. The law does not prohibit the 
infant from contracting. It allows him to contract and 
later if he is not satisfied, he may disaffirm or repudiate the 
agreement. The law permits him to escape the burdens 
which his inexperience may have placed upon him. In- 
fants are favorites of the law, and are entitled to special 
protection. 



24 CONTRACTS 

Field vs. Herrick, 101 111. 110, was a suit by Marshall Field and 
Levi Z. Leiter to cancel a lease which had been executed in person 
by an infant, who owned an interest in the property which was the 
subject of the lease. The court held that the minor had a right to 
execute the lease and also that it was voidable at her election but 
the adults could not avoid it. 

While an executed contract of an infant is binding on 
him until voided, an executory contract is invalid until 
it has been ratified. 

When may the infant disaffirm? The infant may dis- 
affirm any time before he becomes of age or he may dis- 
affirm within a reasonable time after becoming of age. 

Walker vs, Ellis j 12 111. 470, the plaintiff (party starting the suit) 
brought an action to recover the possession of property which he 
had leased to the defendant. One clause in the lease gave the 
defendant an option to purchase the property at a certain sum. 
The plaintiff at the time he executed the lease was but twenty years 
of age. Shortly thereafter he left the State and did not return for 
three years. Upon his return the defendant tendered part payment 
of the purchase price agreed upon in the option but the plaintiff 
refused to accept the tender and repudiated the contract. The 
court allowed him to disaffirm and recover possession of the 
property. 

The Supreme Court of Illinois has held that an infant 
may disaffirm any time within three years after becoming 
of age where real estate is involved. A longer time may 
not be reasonable. 

In Cole vs. Pennoyer, 14 111. 158, the court laid down the rule 
that a deed executed by an infant is voidable but not void. The 
plaintiff executed a deed two years before he became of age, but 
he did not choose to disaffirm until sixteen years later when he 
brought suit to recover the property. He was not allowed to set aside 
the deed. 

In Keil vs. Healey, 84 111. 104, an infant was not allowed to dis- 
affirm and set aside her deed more than three years after attaining 
her majority. 



CONTRACTS 25 

Fraudulent conduct. An infant is responsible in dam- 
ages for injuries due to his fraudulent conduct, and if he 
falsely alleges himself to be of age, for the purpose of in- 
ducing another person to purchase and take a deed of his 
lands, he will be liable to respond in damages for any 
injury which may result to the purchaser in consequence 
of the deceit. But where the infant makes no false state- 
ments and perpetrates no fraud but simply consents to 
the sale of his land by another person the purchaser ac- 
quires no greater right than if the infant had sold the land. 

In Davidson vs. Young j 38 111. 145, an infant consented to the 
sale of land which she had inherited from her father and accepted a 
part of the proceeds of the sale to pay for her education. The sale 
was made by the administrator who had no power to sell except to 
pay debts allowed against the estate, and the infant, on arriving at 
majority was allowed to repudiate the sale. 

It is an axiom of the law that '^a man cannot take the 
benefits of a contract without bearing its burdens. '' Con- 
sequently the infant must affirm all or disaffirm all. He 
cannot affirm the benefits and disaffirm the burdens. 

On disaffirming, must he restore benefits? The law 
permitting an infant to avoid his contract must be used 
'^as a shield rather than a sword, ^' as it is to protect him 
and not to be of use to further fraud. Consequently, if he 
disaffirms a contract, he must restore the benefits, if he has 
them. 

In Brandon vs. Brown, 106 111. 519, it was stated that where a 
minor disaffirms or seeks to set aside a sale of real estate he must 
return or offer to return what he has received, if it be in his power, 
but where he has, during minority, wasted or squandered the 
money, he can nevertheless disaffirm. 

Reynolds vs. McCurry, 100 111. 356, was a suit by an infant to 
set aside a sale of his real estate by his guardian. The sale was made 
by the guardian pursuant to an order of court but the court had no 



26 CONTRACTS 

authority to order the sale. Held, that the fact that the guardian 
squandered the money so that the purchaser could not be repaid 
would not prevent the recovery of the property by the infant, the 
court saying that where the money paid for a conveyance by an 
infant has been expended, so that he is not in a condition to restore 
it, he may nevertheless avoid the conveyance. But if the infant 
still has the consideration he will be compelled to return it. 

Who may disaffirm for infant? If an infant enters into a 
contract and dies without disaffirming, the question arises 
whether anyone else can disaffirm it for the benefit of the 
estate. 

In Illinois Land and Loan Co. vs. Bonner, 75 111. 315, it was held 
that the right to disaffirm is not personal to the minor himself, but 
all gifts, grants, or deeds made by infants, or any matters of deed or 
writing which take effect by delivery of his hand are voidable either 
by the infant himself, by his heirs, or by those who have his estate. 

If the infant becomes insane his conservator may affirm 
or disaffirm the contract. 

Ratification. If an infant affirms he is said to have rati- 
fied the contract. 

The infant may ratify the contract: 

1. By faihng to disaffirm. The law will presume the 
party wants it as it is or he would change it. 

2. By express ratification. 

Sayles vs. Christie, 187 111. 420, held that an express ratification 
of a deed must be made with full knowledge of the consequences. 

3. By acts, as where an infant retains possession and use 
of property that he has bought, beyond a reasonable time. 

Valid contracts of infants. As has been said before, 
infants' contracts are generally voidable. There are, 
however, some contracts of theirs that are valid and some 
that are void. 



CONTRACTS 27 

An infant is liable on all contracts for necessaries. 
Necessaries are all such articles and services as are reason- 
ably necessary to supply the personal wants of a person, 
consideration being given to all of the circumstances and 
station in life of the person. What are necessaries to a 
student in High School, such as books, would not be 
necessaries perhaps to a boy who had finished school. 
Necessaries include food, clothing, shelter, education and 
medical aid. 

In Johnston vs. Maples, 49 111. 101, an executor (person appointed 
by will to carry out its provisions), out of funds belonging to the 
estate, spent money for the necessary support of the minors who 
were given property under the will, without first obtaining the 
authority of the court for such expenditure. In an action on his bond 
the court made an allowance ^'for moneys necessarily expended in 
the support of the children,' sa^dng that an infant may make a bind- 
ing contract for necessary food, clothing, medical aid and education, 
and if unable, from tender age, to procure them, others may furnish 
them and charge a reasonable price therefor. 

McCarty vs. Carter^ 49 111. 53, was an action to collect mone^^ 
for material furnished in the erection of a building on real property 
belonging to an infant. Held, that an infant is not bound by 
his contract for the erection of a dwelling house for the purpose 
of obtaining the rent therefrom, as such a contract is not for 
necessaries. 

In McKanna vs. Merry, 61 111. 177, an infant accompanied a 
family on a trip to California. The infant was under the control 
of her guardian, who disapproved of the trip. There was no proof 
that the journey was necessary for health, or that it was for any 
other purpose than pleasure, or as company for the wife of the 
party who paid the expenses. Held, that the infant's estate would 
not be liable for the money spent on the trip, if the guardian, 
in good faith, and with reference to the best interests of his 
ward, supplied her wants and contributed means suitable to her 
age and station in life. The family took the infant against the 
guardian's wishes and then sought to compel the guardian to pay 
the expenses. 



28 CONTRACTS 

Void contracts of infants. Contracts by an infant 
authorizing, under seal, another to act for htm are abso- 
lutely void. Such a contract is known as a '^ power of 
attorney'^ under seal. 

CONTRACTS OF INSANE PERSONS 

Compared with infants' contracts. In general it may 
be stated that an insane person's contracts are, like an 
infant's contracts, voidable. If he is so insane as to be 
unable to understand what the effect of his act is, the 
contract is voidable. 

But in Illinois when a party (1) has not been declared 
insane, and (2) the other party had no good reason for 
believing him insane, the contract is valid if, 

1. It is beneficial to the insane party, and 

2. The parties cannot be restored to their original posi- 
tions. 

In Sands vs. Potter j 165 111. 397, the plaintiff entered into a con- 
tract of employment to buy and sell butter and cheese for the 
defendant for a period of three years for which he was to be paid a 
certain per cent of the profits of the business in each year. At the 
end of the three years he left the employment of the defendant and 
brought suit for money claimed to be due him under the contract. 
After the contract had been entered into, the defendant was -de- 
clared insane and was taken to an asylum where he remained about a 
year, after which he was adjudged restored to his reason. The court 
held that the insanity of the defendant was not a good defense to the 
suit where there was no evidence that he was insane at the time the 
contract was drawn up, and that the subsequent insanity while the 
contract was in force would not terminate the contract. 

The insane person is liable, like an infant, for necessaries. 
Like the infant also, an insane person^s power of attorney 
under seal is absolutely void. 



CONTRACTS 29 

In Clay vs, Hammond, 199 111. 370, an insane person executed 
a power of attorney authorizing another to convey his real estate. 
The person to whom the power was given conveyed the estate and in 
turn received a re-conveyance to himself in his own right. After 
the insane person was restored to his right mind he conveyed the 
property to another person whom the court allowed to cancel the 
former conveyances as clouds upon his title. 



CONTRACTS OF DRUNKEN PERSONS 

Voidable. A contract made by a drunken person who is 
unable to understand the effect of it is voidable on the part 
of the drunken party. 

In Watson vs. Doyle, 130 111. 415, the court refused to set aside a 
contract on the ground of drunkenness of the complainant where 
there was no evidence that he was drunk at the time the contract 
was made. Evidence that the complainant came home drunk on 
the evening of the day in which the contract was drawn up was held 
not sufficient. The court further held that in order to defeat a con- 
tract on the ground of intoxication it must appear the party was in 
such a condition that he was incapable of understanding the nature 
of the transaction. 

AGREEMENT 

Offer and acceptance. Before there can be a valid con- 
tract, there must be an agreement and the basis of an 
agreement is an offer and acceptance. 

If a party thinks that he is dealing with one party 
when in reality he is dealing with another, he may refuse 
to fulfill his contract, since the parties are entitled to know 
with whom they are dealing. 

In Barker vs. Keown, 67 111. App. 433, Barker bought a horse 
at an auction having been lead to believe it belonged to the estate 
of Vandeventer. The animal was found to be of a vicious dis- 
position and Barker, learning it belonged to Keown, refused to 



30 CONTRACTS 

take it. The court held that ^' every one has a right to select and 
determine with whom he will contract, and may not have another 
person thrust upon him without his consent." Barker was not 
liable. 

Minds must meet. Before there can be a valid sale the 
minds of the parties must meet. If one party believes the 
consideration is to be one amount and the other believes 
it to be a different amount, there is no sale. 

Raber agrees to sell Clark his automobile. Raber is 
thinking of one of his cars but Clark thinks he means the 
other. There is no meeting of minds, so no agreement and 
consequently no contract. 

They must have agreed to the thing in the same sense. 

In Rupley vs. Daggett, 74 111. 351, a party was negotiating for 
the purchase of a horse and offered the owner $65. The owner 
understood him to say $165 and agreed to sell. After the purchaser 
examined the animal and found it to be as represented delivery was 
made without any further words as to the price. In an action by the 
owner to recover the animal the court allowed a recovery on the 
ground that there was no contract because there was a mutual mis- 
take as to the price. 

Must intend contract. Both parties must intend to 
enter into the contract. 

Where an offer is made in jest, there is no contract even 
though there is an acceptance, since the first party intends 
no contract. 

Shipley vs. Carroll y 45 111. 285, was a case in which Elizabeth 
Carroll signed a contract as a joke. This did not constitute a con- 
tract between the parties as only one intended a contract and there 
can be no agreement without a meeting of the minds. 

When offer can be withdrawn. The offer can be with- 
drawn any time before it is accepted. This is true if no 
consideration has been paid to keep the offer open. 



CONTRACTS 31 

Corcoran vs. White, 117 III. 118, was a suit to compel the per- 
formance of an alleged agreement to sell to the complainant a cer- 
tain lot in the city of Chicago. The defendants acted through their 
agent who informed the complainant that he could sell the lot for 
$7000. The complainant replied by his attorney that he was willing 
to accept the proposition if the title was clear and that he would call 
on a certain day and arrange for the abstract. Before anj^thing fur- 
ther was done toward consummating the agreement the agent of the 
defendants discovered the record of an important sale of propert}^ 
in the vicinity of the lot in question, which he considered made 
it his duty to decline to carry out the sale for $7000, and the 
court allowed him to retract his offer. 

In Larmon vs. Jordan, 56 111. 204, Jordan made an offer in 
writing to sell his land to a certain party at a stipulated price. 
About a month later the party to whom the offer was made tend- 
ered a certain sum in part payment of the purchase price and 
agreed to take a contract for the land. Jordan declined and de- 
clared his proposal abandoned. Held, that there was no contract, 
as Jordan had a right to withdraw his offer within a reasonable 
time, and even had he set a time limit for his offer he might have 
withdrawn it at any time before it was accepted, when no money 
was paid to keep the offer open. 

When offer cannot be withdrawn. Where a valuable 
consideration has been paid to keep the offer open the 
party who revokes the offer before the time set expires 
is liable for damages. 

Guyer vs. Warren, 175 111. 328, was a suit to compel the de- 
fendants to convey to the complainant certain land which they had 
agreed to sell at $100 an acre. The defendants had signed a written 
contract giving to a certain party for an expressed consideration the 
option or right of purchasing the property at said price and the 
complainant had taken an assignment of the contract and paid an 
additional sum for an extension of the option. The defense was that 
the complainant was not bound by the agreement and consequently 
the defendants could not be bound. Held, that the defendants were 
bound to keep the offer good for the time specified in the contract 
and that such an agreement upon a sufficient consideration does not 



32 CONTRACTS 

corae within the class of contracts which are required to be binding 
on both parties in order to be valid. 

Lapse of offer. There are various ways in which an 
offer may lapse. An offer may lapse: 

1. When not accepted within the time allowed for 
acceptance. - 

In Harding vs. Gihhs, 125 111. 85, a property owner leased certain 
property to Gibbs and in the lease gave the lessee an option to pur- 
chase the property at a certain price. If the owner had an opportun- 
ity to sell to another party, however, he was to notify the lessee, who 
was then to have the opportunity of purchasing at the price offered 
by said other party which was not to exceed the price stipulated in 
the lease, but the option was to be exercised within ten days after 
receipt of such notice. During the term of the lease the owner had 
an opportunity to sell and notified the lessee, who failed to act upon 
his option within the ten days. Held, that the failure to exercise the 
right to purchase within the time limited destroyed the option, 
although the term of the lease had not expired. 

2. When not accepted within a reasonable time, but no 
arbitrary rule can be given as to what a reasonable time is, 
as each case must be decided according to all the facts 
involved. 

As to when a contract is completed by offer and accept- 
ance the rule in Illinois is clearly stated in Larmon vs, 
Jordan, 56 111. 204, cited on page 31. 

"When the time is limited, by the offer, during which it is to 
continue, then, if without any previous revocation the offer is 
accepted, the presumption of a meeting of minds would be con- 
clusive, simply because the offer is presumed to have been renewed 
during every moment of the time limited, which signifies the assent 
of the vendor and the acceptance that of the vendee. So, if no time 
be limited, the offer, in the absence of evidence to the contrary, 
will be presumed to have been renewed every moment during a 
reasonable time and no longer. If, therefore, there be no acceptance 



CONTRACTS 33 

within a reasonable time, there can be no presumption of a meeting 
of minds, because there can be none of a continuance of the offer to 
the time of acceptance." 

3. The insanity of either party will work a revocation 
of an offer. 

Beach vs. First M. E. Churchy 96 111. 177, was an action to re- 
cover an unpaid portion of a subscription to a church building fund. 
Before the trustees of the church had spent any money on the faith 
of the subscription or incurred any habilities the subscriber was 
adjudged insane. Held, that the subscription was a mere offer until 
acted upon by the church and that the insanity of the subscriber 
revoked the offer and even though his conservators paid a part of the 
subscription, the remainder of the pledge could not be collected. 

4. Or the death of one of the parties. 

In Pratt vs. Trustees of Baptist Society, 93 111. 475, a party gave 
two promissory notes, the amount of which, when collected was to 
be used in purchasing a bell for a church. The trustees of the church 
society made no effort to procure a bell until after the death of the 
promisor. In an action against the administratrix to collect the notes 
it was held that collection could not be enforced as a promise to 
make a gift, that as the offer was not acted upon during the life of 
the promisor it was revoked by death, and that a promissory note 
given in such a case does not differ from an ordinary subscription. 

Acceptance must be without qualifications. There must 
be no new terms suggested by the party wishing to 
accept. The acceptance must be without qualifications 
of any kind. 

In Bolton vs. Huling, 195 III. 384, the defendant accepted a 
written offer to buy certain real property which he owned by an 
indorsement on the back of the offer that he accepted ^Hhe within 
if title proves satisfactory. '^ Upon his refusal to go to any expense to 
make his title acceptable to the plaintiffs, they brought an action 
for breach of the contract. Held, that the acceptance was conditional. 



34 CONTRACTS 

;)iid that if such title as the defendant could give was refused \)y the 
l)laintilfs the defendant could withdraw from the trade and termniate 
the contract. 

Where, for example, the acceptance is quahfied as to the 
terms of payment there is no contract. 

A quahfied acceptance is in effect a new offer and the 
({uahfied acceptance (or new offer as it really is) must be 
accepted before there is a contract. 

In Maclay vs. Harvey, 90 111. 525, the defendant wrote a letter to 
the plaintiff inquiring whether he could obtain her services as a 
milliner. She replied stating her terms, which the defendant ac- 
cepted but in his letter of acceptance stated some conditions which 
amounted to slight variations in said terms. Held, that the de- 
fendant's letter of acceptance, which contained variations in the 
terms, could not be regarded as the consummation of the contract, 
but required an acceptance upon the terms thus stated, and until so 
accepted within the required time, was only a proposition or offer. 

Acceptance binding when communicated. An offer and 
acceptance does not make a contract unless the party 
making the offer knows it has been accepted. 

How acceptance should be made. The acceptance 
should be sent in the same manner as the offer was sent. 
If the offer is sent by mail, the answer should go by mail. 

If the acceptance is sent the way the offer was sent, 
there is a contract, binding on the parties when the 
acceptance is sent. 

In Chytraus vs. Smithy 141 111. 231, a trust company, which 
became the owner of a certificate of purchase, authorized its agent 
to sell the certificate to the first person who would pay for it in full. 
The mortgagor informed the agent that he was ready to purchase the 
certificate and by mail asked if he could get an assignment. The 
agent replied by mail: ''Get ready to take certificate and you shall 
have it." The answer was not received until two or three days after 
it was mailed and in the meantime the trust company authorized 
another agent to sell the certificate and it was sold. Held, that the 



CONTRACTS 35 

contract for sale to the mortgagor was completed when the agent's 
reply was mailed and not when it was received, and that the trust com- 
pany could not then authorize another agent to sell the certificate. 

It is binding even though the reply was never received, 
if the acceptance is sent in the same manner as the offer. 
The reason is that when A tells B to mail an answer the 
mail is A's agent and a letter given to A's agent is a letter 
to A. But if B replies by telegram the telegraph company 
is B's agent and until it is actually received neither A nor 
his agent has received it and there is no contract. 

But in Haas vs. Myers, 111 111. 421, this rule was held not to apply 
where actual acceptance of a reply is necessary to give the offerer 
certain information upon which he is to act. Two parties were con- 
templating the purchase of a herd of Montana cattle for shipment 
to the Chicago market. One of them went to Montana, ascertained 
the terms for the purchase and wired the other party in Chicago if 
he wanted an interest in the transaction. The Chicago party wired 
back: ''Yes, I will take third interest," but this reply was never 
received. The party in Montana went ahead and raised the money 
for the purchase, shipped the cattle to Chicago and made a good 
profit. The Chicago party brought suit for a share in the profits 
alleging that he had contracted for a third interest. Held, that no 
contract was made by the sending of a reply which was never re- 
ceived, as the reply contained information to govern the actions of 
the parties. 

Three ways of showing acceptance. An offer may be 
accepted in three different ways so that there is a contract. 
It may be accepted by: 

1. Words, 

2. Conduct, 

3. Performance of the terms of the offer. 

Acceptance by words. No particular words are neces- 
sary to complete the contract by acceptance. Neither is 
any particular form of acceptance necessary. The law 



36 CONTRACTS 

looks to the intention of the parties. If the intention is 
clear that the parties made an offer and acceptance that 
is a contract. 

In Vaughn vs. Owens, 21 111. App, 250, all the corn Hendrix had 
growing was sold at twenty cents a bushel after the transfer of a note. 
It was agreed that the corn was to be measured later. M. T. Vaughn 
made the offer. Hendrix said, ^' It is a trade; it is your corn." The 
court held that the parties intended the sale to be complete before 
the corn was measured and so the title to the corn passed at the time 
of Hendrix's statement. 

Acceptance by conduct. A party may accept by conduct. 
If by his conduct a man leads another to believe he has 
accepted an offer, he can be held to the contract. 

Huch vs. Flentye, 80 111. 258, was an action for the cost of ma- 
terials used in the construction of a wall to be used jointly by both 
parties on the Hne between adjoining lots of the plaintiff and de- 
fendant in the city of Chicago. A fire had destroyed the buildings 
formerly built on the lots and the parties proceeded to erect new 
buildings without any express agreement as to who should pay for 
the common wall on the lot line. Held, that no express agreement 
was necessary but the plaintiff who paid for the materials used in 
the construction of the wall was entitled to contribution from the 
defendant who at the same time made use of the wall in the erection 
of his building. 

Acceptance by performance. Where a party performs 
the conditions of the contract the law will consider this an 
acceptance. 

Merchants Building Improvement Co. vs. Chicago Exchange 
Bldg. Co., 210 111. 26, was an action to collect a subscription toward 
the construction of the Chicago Stock Exchange Building in the city 
of Chicago. The subscriber, for business reasons, was desirous of 
having the new office building on the corner of Washington and 
LaSalle Streets where it was proposed to be erected, and the sub- 
scription was upon the express condition that the building be oc- 



CONTRACTS 37 

cupied by the Chicago Stock Exchange. The subscription was se- 
cured by promoters, but after it was made the plaintiff, the Chicago 
Exchange Building Company was organized, acted upon the sub- 
scription, erected the proposed building and fulfilled all the condi- 
tions. Held, that the action of the plaintiff corporation amounted 
to an acceptance of the offer although it was not even in existence 
when the subscription was made, and the plaintiff was permitted 
to collect the pledge. 

Gratuitous act not acceptance. Where a party performs 
an act which would be ordinarily considered a mere 
friendly act he cannot turn this into an acceptance of an 
implied contract. 

Henderson in distress calls out to Fitch, *' Save me ! ^^ and 
the latter plunges into an icy stream and saves him at great 
peril to himself. Fitch cannot later claim that he did this 
in acceptance of an offer to do certain services for him and 
recover compensation. It is considered a mere friendly act . 

Terms must be certain. There is no contract when the 
terms of the agreement are so vague that there is doubt 
as to the intention of the parties. 

Woods vs. Evans, 113 111. 186, was a suit by an orphan to compel 
the performance of an agreement to give her a ^'child's part" 
of an estate provided she would live in 'the home of the promisor 
and render ordinary services until she became of age. In addition 
she was to receive support and education while in the home. Held, 
that the contract could not be enforced because of the uncertainty 
as to what would constitute a child's part in an estate. The promisor 
might by his will dispose of all his estate. 

But it is also the rule that, ^^ That is certain which can be 
rendered certain. ^' Consequently even though the terms 
in the written contract are indefinite or vague if oral testi- 
mony will show clearly what is meant the contract is valid. 

Grier vs. Puterbaiigh, 108 111. 602, was an action on a written prem- 
ise to pay $3000 to the plaintiff for using his efforts to secure the 



38 CONTRACTS 

location of a government building on the ^'Post-office Corner" in 
the city of Peoria. The court held the description of the property 
in the contract as ''the corner of Main and Monroe Streets, in Peoria, 
known as the present 'Post-office Corner' " was sufficient to locate 
the property on which the building was to be erected, and that a par- 
ticular description by metes and bounds or numbers was unnecessary. 

Rewards. When rewards are posted or advertised they 
constitute pubhc offers and may be accepted by anyone 
who has notice of them. An offer to the public is an offer 
to anyone of the pubhc, and when accepted by w^ords or 
performance becomes a vahd contract. 

County of Montgomery vs. Robinson, 85 111. 174, was an action 
to recover an award offered by a county for the arrest of any horse 
thief who was convicted. Robinson's horse was stolen and sometime 
afterward he learned that the thief had been arrested and confined 
in a jail in North Carolina on another charge. He secured an order 
from the Governor for the return of the thief and hired a man to go 
to North Carolina and bring him back. This was done and upon the 
return and conviction of the thief Robinson sued for the reward and 
was allowed to recover. 

But it is necessary that the party claiming the reward 
have previous notice of the offer, since a man cannot accept 
an offer that he knows nothing about. If he knows nothing 
of the offer he is not acting upon it when he does his work. 

In Williams vs. West Chicago Street R. R. Co., 191 111. 610, the 
following offer of reward was published in the Chicago Tribune: 

^'$5000 REWARD. 
"OFFICE WEST CHICAGO STREET RAILROAD CO., 

"June 24, 1895. 

"The above reward will be paid by the West Chicago Street 
Railroad Company for the arrest and conviction of the murderer 
or murderers of C. B. Birch, who was fatally shot while in discharge 
of his duty as receiver, on the morning of June 23, at the Armitage 
avenue barn. CHARLES T. YERKES, Pres't." 



CONTRACTS 39 

The reward was published the day after the murder was committed 
but the plaintiff did not learn of the reward until the next day when 
he read the paper for the first time. In the meantime he had given 
information which led to the apprehension and conviction of the 
murderers. Held, that he could not recover the reward because he 
did not know of the offer at the time he gave the information. 

The conditions of the public offer of reward must be 
strictly complied with, by the party seeking to recover. 

In Shuey vs. United States, 92 U. S. 73, the Secretary of War 
offered a reward ^'for the apprehension of John H. Surrat, one of 
Booth's accomplices " in the assassination of President Lincoln. The 
plaintiff gave information which led to the discovery and arrest of 
Surrat, but he was not allowed to recover the reward, as it was 
expressly stated to be for the ''apprehension" of Surrat and not 
merely for information as to his whereabouts. 

Revocation of offer of reward. Like any other offer it 
may be revoked: 

L By the party making the offer expressly revoking it, 
if he gives the revocation as great publicity as the offer, 

2. By lapse of reasonable time. What is a reasonable 
time depends upon all the facts in each particular case. 

When may officer recover reward? A public officer 
cannot recover the reward when he is already bound to do 
the service. If a policeman is on duty and captures a 
criminal he is not entitled to a reward. He is already paid 
to capture all criminals and so has received his compensa- 
tion for the capture of any particular one. 

Stophlet vs. Hogan, 74 111. App. G31, Hogan, the sheriff of Pulaski, 
seeking to secure the reward offered by Mound City citizens, for the 
apprehension and conviction of the person who set fire to a building 
in that city, arrested and helped secure the conviction of the guilty 
party. Stophlet refused to pay his share and was sued. The court 



40 CONTRACTS 

held that when the duties of a pubHc officer are fixed, and his com- 
pensation is fixed by law, he cannot be allowed to contract and sell 
his services for higher rates than the law gives him. The sheriff 
here did no more than his legal duty and he cannot recover. 

But, it seems that he can recover if the services were 
outside the scope of his duties, since he has not been paid 
for the acts aside from his employment. 

REALITY OF CONSENT 

Did the parties agree? Although there may seemingly 
be an agreement, yet there are five things, anyone of which 
may as a matter of fact have prevented the parties from 
really assenting. These five are : 

1. Mistake, 

2. Fraud, 

3. Misrepresentation, 

4. Undue influence, 

5. Duress. 

Difference between mistake, fraud and misrepresenta- 
tion. Mistake, that will avoid a contract: 

1. Must have been mutual, 

2. It must have been about a material fact, 

3. The parties must have been innocent of any wrong- 
doing. 

Fraud is anything tending to deceive. What is fraud 
sufficient to avoid the contract depends upon all the facts 
in any particular case. It is not mutual, but the act of one 
party. 

Misrepresentation consists of a misstatement of a 
material fact or non-disclosure in some cases. 



CONTRACTS 41 

Mistake. Mistakes are of two kinds: 

1. Of Law, 

2. Of Fact. 

Mistake of law. Everyone is presumed to know the law, 
consequently a mistake of law will not of itself invalidate 
the contract. 

In Drake vs. Latham, 50 111. 270, the defendant purchased a tax 
title to a tract of land. In a law suit he set up that the plaintiff had 
represented to him that the title was a ''good tax title,'' whereas it 
was invalid and useless. Held, that the representation was not fraud- 
ulent as the defendant knew he was buying only a tax title and the 
question whether it was a good tax title was a question of law and the 
defendant could not set up the mistake if it was not good. 

Mistake of fact. A mutual mistake of fact will excuse 
the parties from fulfilling the contract. 

An example of this is an agreement to sell a certain 
horse in a barn where there were two horses, one party 
thinking of a black horse and the other party thinking of a 
bay horse. (See Rupley vs. Daggett, cited on page 30, 
where there was a mistake in the price.) 

Signing without reading. Where a party able to read, 
signs his name to the contract and later discovers it was 
not the agreement he thought it was, he cannot escape 
liability. 

The Court in Black vs. Wabash St. Louis & Pacific R. R. Co., 
Ill 111. 351, said: ^' Where a party of naature years and sound mind, 
being able to read and write, without any imposition or artifice to 
throw him off his guard, deliberately signs a written agreement 
without informing himself as to the nature of its contents, he will 
nevertheless be bound, for in such case the law will not permit him 
to allege, as matter of defense, his ignorance of that which it was his 
duty to know, particularly where the means of information are within 
his immediate reach, and he neglects to avail himself of them.'^ 



42 CONTRACTS 

If a party unable to read is misinformed and consequent- 
ly signs a pa})cr of an entirely different kind from that he 
thought he was signing, the contract may be invalidated. 

Schaper vs. Schaper, 84 111. 603, was a suit to set aside an instru- 
ment which the complainant had signed with her husband and which 
was given to secure the price of land which the husband purchased 
or pretended to have purchased from his mother and brother. By 
her signature the complainant relinquished her homestead and 
right of dower in the land and in her bill she alleged the transaction 
was for the sole purpose of defrauding her of her rights in the 
property which her husband inherited at the death of his father. The 
complainant was German and could neither speak nor understand 
English. She was not informed of the nature of the transaction 
but thought she was signing an instrument of a different nature. The 
court held that as there was no disinterested person present to 
interpret the instrument the complainant was entitled to have it set 
aside. 

In other words the test is whether or not ordinary 
diligence has been exercised. 

Fraud. What fraud is, is usually well understood. The 
courts have often refused to define it lest it be limited. It 
depends upon all the facts in a particular case, as to whether 
there has been fraud. It is not fraud for a man to belittle 
what the other party is to give in a contract. Generally 
it is not fraud to exaggerate one's own goods. 

Crocker vs. Mauley, 164 111. 282, was a suit to set aside a con- 
veyance of property which the complainant made to pay for stock 
in a silver mine in Mexico. The complainant alleged that he was 
induced to take the stock upon fraudulent representations as to the 
value of the mine. The representations were that the mine was rich 
with silver, that it would pay a dividend of from twenty to one hun- 
dred per cent, and that there was enough ore on the dump at the mine 
to pay the par value of the stock. Held, that such statements were 
mere matters of opinion and were not fraudulent, and that any state- 
ments as to matters of fact were not fraudulent if made in good faith 
and were believed to be true by the party making them. 



CONTRACTS 43 

Misrepresentation. Four things are necessary before a 
party can be said to be guilty of such misrepresentation as 
will avoid a contract for fraud. They are: 

1. A false representation of a material fact must be 
made by a party who knows it is false or who makes it 
recklessly without regard to its truth. 

2. An intent to induce the other party to enter the 
contract, 

3. A reasonable reliance upon the false or reckless 
misrepresentation, and 

4. The contract must have been entered into because 
of such reliance. 

Explanation. 1. The false representation of the material 
fact must have been made by the party with the knowledge 
that it was false. 

Jones vs. Foster, 175 III. 459. Here the complainant was induced 
to execute a quit-claim deed to certain lots upon the representation 
that he was no longer the owner of the lots, that they had been 
purchased at a sale along with other lots in the same subdivision, 
and that the quit-claim deed was to cover a defect in the foreclosure. 
As a matter of fact the complainant's lots were omitted from the 
sale for good reason, which the complainant, had he exercised 
ordinary prudence, would have known. On the other hand the de- 
fendant's representations were made with an honest belief in their 
truth and the complainant was not allowed to set aside the quit- 
claim deed. 

A false representation recklessly made without any 
knowledge of the particular matter or without any basis 
for a belief in it may be deemed fraudulent. 

In Case vs. Ayers, 65 111. 142, a vendor sold a quantity of wool, 
done up in fleeces which contained a lot of extraneous substances, 
and which was in such condition that he must have known it was 
not merchantable. Held, that a purchaser who bought the wool in 



44 CONTRACTS 

good faith was entitled to an action for the fraud and deceit and that 
proof of a fraudulent design to injure him was not necessary to en- 
title him to recover. 

2. The false representation must be made with the 
intent to induce the other party to enter the contract, 
even if intended for one of the public. 

In Delano vs. Case, 121 111. 247, a depositor in a bank was allowed 
to recover a loss due to negligence of the directors in holding the bank 
out as solvent when, in fact, it was insolvent. (There is now a statute 
in Illinois making it a penitentiary offense for a banker to accept 
deposits while the bank is insolvent.) 

In Gilhey vs. Hamlim, 297 111. 258, it was held that a party cannot 
be charged with negligence in relying upon a false statement al- 
though the parties are dealing at arm^s length when the false state- 
ment is of a material fact and is made with the intention that it shall 
be relied on. 

3. If the false representation is not one that a party 
would reasonably be expected to rely upon there will be 
no action. 

In Moore vs. Recek, 163 111. 17, the complainant exchanged 
certain lots for a second mortgage on another lot on the representa- 
tion that the latter was of sufficient value to cover the amount of the 
mortgage. Upon discovering that the mortgaged lot was not of 
sufficient value to pay the second mortgage after the prior mortgage 
was satisfied the complainant brought suit to set aside his convey- 
ance on the ground of misrepresentation. Held, that as the com- 
plainant had opportunity to examine the lot and to know its value 
he was not required to rely upon the representation and should have 
used his own judgment. 

(See, also, Jones vs. Foster, 175 111. 459, cited on page 43.) 

4. Assuming all these things have been true yet the 
party must, of course, have made the contract relying upon 



CONTRACTS 45 

the false representation. If he made the contract but did 
not believe the representation then there is no reason why 
he should set up the misrepresentation. 

In Dady vs. Conditj 163 111. 511, Dady entered into a contract to 
convey real property to Condit but refused to carry out the agree- 
ment after the property increased in value because of the location 
of a manufacturing plant nearby. He alleged that Condit mis- 
informed him as to the location of the plant, but his own testimony 
showed that he did not rely on Condit 's statements and he was 
not allowed to avoid the contract on the ground of misrepresentation. 

In Young vs. Young, 113 111. 430, the son said to the father, ''If 
you deed this land to me, I will deed it back at any time 3^ou want it." 
The court held that the evidence showed that the father placed no 
reliance on this statement, and so the representation was of no con- 
sequence and immaterial, as far as this particular contract was con- 
cerned, so it would not be set aside for fraud. 

If the contract has been executed, the party deceived 
must show, in addition to the above propositions, that he 
has suffered damage because of the deceit. 

Matters of opinion. A party is not liable where he 
merely expresses his opinion. A party states it as his 
opinion that a house will sell for $12,000 in the Fall. Jones 
buys it for $11,000 but is unable to sell for more than 
$10,000 so loses $1,000. He cannot recover this from the 
party who sold it to him. 

In Brady vs. Cole, 164 111. 116, the complainant was told by 
a real estate agent that if she would exchange her homestead prop- 
erty for a certain tract of land she could make enough out of the 
sale of lots in the tract to pay for the building of a house on one 
of the lots. In a suit to set aside the conveyance the court held 
that such statements by the agent were mere expressions of opinion 
and were not misrepresentations of fact. The court said, ^'Mere 
expression of an opinion held by a party cannot, standing alone, 
be held misrepresentation. The statement must be the affirmation 



46 CONTRACTS 

of a fact. The reason of this rule is, that while the person to whom 
the misrepresentations are made has a right to rely on them, he is 
assumed to be equally able, from his own opinion, to come to as 
correct a conclusion as the other party, and therefore cannot claim 
to be misled by such an opinion. Promises for the future and hope of 
realizing speculative profits are not fraud." 

In Shackelton vs. Lawrence, 65 111. 175, the vendor in a contract 
for the sale of land stated that a crop of wheat was growing on fifty 
acres of land, that fourteen bushels of barley had been sown, and a 
quantity of oats and potatoes had been put in. Held, that if such 
statements were made as representations of facts, the purchasers 
were justified in relying upon them and were not required to dis- 
cover the amount of the crops, but if the parties had equal means of 
information as to the truth of the assertions, the purchasers would 
not be justified in relying on the statements. 

To constitute fraud the statement must relate to the 
present or the past. A statement as to the future is not 
fraud. In the following case the insured made a statement 
as to the future and the court held this promise as to the 
future was not fraud. 

The Commercial Mutual Accident Co. vs. Bates, 176 111. 194, 
was a suit on an accident insurance policy. The company sought 
to avoid liability on the ground that the insured, in his application for 
a policy, stated that he would, on a certain date, drop a certain 
amount of accident insurance which he was carrying in another com- 
pany. Held, that the failure of the insured to drop his other insur- 
ance on said date or before his death was not such a breach of war- 
ranty as would defeat the policy and that the promise was not such 
a representation as could be made the ground of an action for fraud. 

Puffing. The practice that owners have of praising their 
goods in the most extravagant terms is known as puffing. 
The law allows the parties to do a certain amount of this 
without being liable, assuming that the other party will 
not, or at least should not, believe everything told him. 
As one court said, where the parties are dealing at arm's 



CONTRACTS 47 

length the seller has the right to puff his land ^'in the most 
extravagent terms, the other party being at liberty to 
exercise his own judgment about it " and such puffing will 
not constitute a cause of action in favor of the buyer. 

A statement that a horse is the best horse in the world, 
even though known by the seller to be false, does not 
constitute false representation. 

In NoetUng vs. Wright, 72 111. 390, the plaintiff sued for damages 
for deceit and misrepresentation in the sale of certain real estate and 
drugs, and the practice of good will of a physician. The plaintiff 
alleged that the defendant represented his practice as being worth 
from $3500 to $6000 per annum, whereas it was not worth $500. 
Held, that the action could not be maintained and that a vendor 
has a right to put his own value on property he is trying to sell. 

But in Neil vs. Cummings, 75 111. 170, the complainant purchased 
the right to sell a patented article in certain counties, on representa- 
tions by the defendant's agent that there was a great demand for 
the invention, and that it had been adopted in certain localities to 
the exclusion of other machines. Upon proof that the invention was 
useless, that the representations were fraudulent and grossly false 
and that the defendant had knowledge of the fraud, the complainant 
was allowed to cancel a note and mortgage he had given for the 
patent right. 

The parties are said to be dealing at arm's length when 
the fiduciary relation does not exist. (See p. 48 for fidu- 
ciary relation.) 

Undue influence. Undue influence is a ground upon 
which contracts, deeds and wills are often set aside. Undue 
influence is wrongful influence. 

In Sands vs. Sands, 112 111. 225, an aged mother had executed 
a deed to her son. The deed had subsequently been destroyed and 
the suit was to compel a re-execution. The complainant was denied 
relief on the ground that the original deed was executed through 
undue influence and because the mother, having unlimited con- 



48 CONTRACTS 

fidence in her son, believed his statement that the deed would 
not take effect until it was recorded. The court held that under 
such circumstances a presumption of undue influence arises and 
the burden is on the son to prove that the transaction was fair. 

Dorsey vs. WolcoUj 173 111. 539, was an exceptional case of 
the exercise of undue influence upon an old man who was stricken 
with paralysis. When nearly eighty years of age, and no more 
capable of taking care of himself than an infant, he executed a deed 
to his brother who promised to care for him the rest of his life. Upon 
the brother's failure to do so after obtaining the deed the grantor 
executed three other deeds at different times to different parties, 
each of whom, in turn, failed to carry out a promise to take care of 
the grantor. The court set aside all of the deeds, for failure of con- 
sideration and because of the exercise of undue influence upon the 
grantor, who, of necessity, had to make provision for the care which 
his condition required. 

In Campbell vs. Freeman, 296 111. 536, the Supreme Court held 
that old age, eccentricity or even partial impairment of mental 
faculties, is not necessarily sufficient to set aside a deed, and if a 
grantor had sufficient mental capacity to know the nature of the 
transaction in making a deed and its meaning and effect, and is able 
to protect his own interests, the deed will not be set aside. 

Undue influence that will justify setting aside a deed 
must have been of such a nature as to deprive the party of 
his own free agency and make the act more of the will of an- 
other than of his own. Honest advice, argument or persua- 
sion, is not such undue influence if the grantor acts freely. 

The fiduciary relation. The fiduciary relation is the 
relation that requires that the parties exercise the good 
faith in all their transactions. 

The following are common illustrations of this relation: 

1. Parent and child, 

2. Guardian and ward, 

3. Doctor and patient, 

4. Principal and agent, 

5. Lawyer and client. 



CONTRACTS 49 

When this relationship exists the law requires that the 
party who has real or apparent authority over the other or 
who is superior in capacity or knowledge shall put the 
other party in full possession of all facts needed for the 
latter to act intelligently and wisely. To do less is a breach 
of trust. 

The law forbids the party who stands in the superior 
position in this relation from making profit at the expense 
of the other party whose interests he is to protect. The 
latter party should be in full possession of all the facts. 

It must not be imagined that this principle holds only in 
the five cases just named. It applies wherever the relation 
exists as a matter of fact. It exists ^^ where confidence is 
reposed by one party and the trust accepted by the other. " 

In Irwin vs. Sample, 213 111. 160, the brothers of Sample's wife 
were held to occupy a fiduciary relation to him after his wife's 
death when they induced him to give up his interest in his wife's 
property and to waive his right to administer her estate. Im- 
mediately following the wife's death Sample was in a condition of 
great prostration, both physically and mentally, and was unfit to 
care for his own rights in dealing with persons desirous of furthering 
their own interest at his expense and a conveyance by Sample to 
said brothers was canceled and set aside. 

Puffing by a party in the fiduciary relation if relied upon 
by the other party will invalidate the contract. 

The court said in Lockridge vs. Foster, 4 Scam. 569, that ^' fraud 
may consist in a suppression of truth as well as in a suggestion of the 
false." 

But if the fiduciary relation does not exist the mere 
failure to disclose all the facts does not necessarily con- 
stitute fraud. There may not have been a duty to reveal 
the truth. 



50 CONTRACTS 

DURESS 

Contracts made under duress are voidable. Duress is 
unlawful compulsion. When a man enters into a contract 
under unlawful compulsion the contract is voidable. 

In Spaids vs. Barrett, 57 111. 289, the court held that "all promises 
made and contracts entered into, where there is duress of the person, 
may be avoided" and that the same rule applies where there is a 
threatened destruction of property. 

The duress may be against a relative. The duress need 
not be against the person entering the contract against his 
will but may extend to a near relative as a husband, wife, 
parent, child, or grandchild. 

Bradley vs. Irish, 42 111. App. 85, is a case where Bradley told 
Mrs. Irish, an old lady, that her grandson would be sent to the 
penitentiary and was already under arrest. She was led to beheve 
that if she gave some notes and a mortgage her grandson would be 
freed. She gave them and he was freed. Later she refused to pay 
and the court said she was not bound to pay. Said the court, ''It 
has too much of robbing the grave to pay the debts of deceased 
relatives. The fact that this old lady would mortgage her homestead 
and thereby turn herself out into the street, is proof enough that this 
criminal device succeeded but too well and shows the overwhelming 
pressure that was brought to bear upon her." 

Duress by imprisonment. Duress may be exercised by 
unlawful imprisonment. 

Plummer vs. People, 16 111. 358, was a suit on a bond for the 
appearance of a defendant who failed to appear for trial. The bond 
was executed by the defendant while he was imprisoned in the 
county jail. The evidence showed that the imprisonment was un- 
lawful, because the crime was committed in another State and the 
proceeding was not in conformity with the statute for the detention 
of fugitives from justice. On a plea of duress the defendant was al- 
lowed to avoid the bond. 



CONTRACTS 51 

There must have been some very good cause for acting. 
An idle threat is not reasonable cause and does not con- 
stitute duress. 

In Rendleman vs, Rendleman, 153 111. 568, the complainant 
sought to set aside a deed because, he alleged, it was executed under 
a threat of imprisonment by a United States officer. There was a 
threat of imprisonment but the complainant was neither under 
arrest nor confined at the time the deed was executed, and he had 
the advice of friends who were present. The court held that the 
deed was executed after due deliberation by the complainant and 
that ''mere threats of imprisonment, for which there is no ground, 
do not constitute duress." 

Duty of plaintiff. The plaintiff who desires to have a 
contract set aside on the ground of fraud or misrepresenta- 
tion must offer to place the other party in the position he 
occupied before the transaction complained of took place. 

In Rigdon vs. Walcott, 141 111. 649, the complainant alleged 
that he accepted a certain sum of money upon the misrepresentation 
of the defendant and surrendered a certain contract by which he 
had acquired an interest in the bonds and in the shares of stock 
of the proposed Chicago and South Side Rapid Transit R. R. Co. 
which was then being organized. The alleged misrepresentations 
were that the proposed company was to be taken over by the 
Chicago City Ry. Co. and that the best the complainant could get 
out of his contract was the sum of money he was induced to accept. 
He asked the court to rescind his assignment of his contract but 
alleged that he could not tender back the sum he had received 
because of financial obligations. Held, that the complainant was 
not entitled to relief and that his excuse for not offering to return 
the money was of no avail. 

LEGAL SUBJECT MATTER 

Explanation. Contracts are void when the subject mat- 
ter of the contract is illegal. A contract against public 
policy or injurious to the public is illegal. 



52 CONTRACTS 

In People vs. Chicago Gas Trust Co., 130 111. 268, the Chicago 
Gas Trust Company, which was organized for the purpose of 
manufacturing and selling gas to the inhabitants of the city of 
Chicago, was not allowed to purchase stock in other gas companies 
although the company's articles of incorporation provided that it 
was organized for that purpose, also. Such a provision was held ille- 
gal as authorizing the creation of a monopoly. 

In Jerome vs. Bigelow, 66 111. 452, the parties were both prac- 
ticing physicians in the city of Chicago. They entered into a con- 
tract by the terms of which Jerome, for the consideration of $40,000, 
was given the right to practice medicine in the name of Bigelow and 
take possession of his office for a period of ten years. The suit was 
to prevent the practice of medicine by Bigelow in violation of the 
agreement. Held, that the contract was a fraud upon the public and 
could not be enforced. 

Courts are instituted to carry out the laws so it is not 
reasonable to expect them to enforce contracts whose 
provisions evade the spirit of the law. Neither does the 
law ever permit to be done indirectly that which it pro- 
hibits from being done directly. 

In Wells vs. People, 71 111. 532, a board of school directors hired a 
teacher to teach for six months at $45 a month. The teacher had not 
obtained his certificate at the time the contract was made, but he 
did obtain it three months later and on being advised that he could 
not be paid anything for his services for said three months because 
his contract was illegal without his certificate, he secured another 
contract with the directors for a salary of $90 a month for the re- 
maining three months. Held, that the second contract was not good 
for more than $45 a month, as the law did not authorize com- 
pensation for the first three months and compensation could not be 
obtained indirectly where the directors had no power to pay it 
directly under the first contract. 

Courts leave guilty parties where they find them. The 
general rule is that where parties enter into a contract 
which is illegal the law will leave the parties where it finds 
them, aiding neither one nor the other. 



CONTRACTS 53 

An exception exists in Illinois in regard to gambling 
contracts. Whenever money has been lost on such a 
contract the money lost may be recovered if the loser 
brings suit within six months. Nevertheless, gambling 
contracts are void. The winning party cannot legally 
keep his earnings. 

In Richardson vs. Kelly, 85 III. 491, the plaintiff entered his 
horse in a race with another horse, the one being wagered against the 
other. The plaintiff's horse failed to win the race and in an action 
to recover the animal the defendant argued that the plaintiff had no 
cause of action because he did not protest when the defendant took 
the animal after the race was over. Held, that the statute allowed a 
recovery by the losing party even though he without protest per- 
mitted the winner to take the money or property wagered. 

Guy man vs. Burlingame, 36 111. 201, was a suit on the following 
promissory note: 

'^Thirty da^^s after date, we, or either of us, promise to pay A. H. 
Burlingame, or bearer, one hundred and sixty dollars, for value 
received, providing Abraham Lincoln receives the electoral votes of 
the State of lUinois. Eden, Oct. 15, 1860.'^ Signed: '^Noah Guy- 
man, S. J. Moore.^' 

The court held that the note was void because on its face it 
showed that it was a wager on the result of a public election. 

Contracts with the enemy. If during the late war with 
Germany a citizen of the United States had entered into a 
contract with a citizen of Germany the contract would 
have been void as it is against public policy to carry on 
trade with the enemy. 

Agreements to hinder justice* Any agreement that 
makes the enforcement of the law more difficult or hinders 
the course of justice is absolutely void. 

In Arter vs. Byington, 44 111. 468, the plaintiff, during the civil 
war, was engaged in illegal trade with the rebel States. On being 
found out by the defendant he paid the defendant $1000 on the 



54 CONTRACTS 

la iter's promise not to report him to the United States marshal. In 
an action to recover the sum so paid, the court applied the maxim 
that no action arises out of an illegal transaction and would not allow 
the plaintiff to recover. 

Henderson vs. Palmer, 71 111. 579, was a suit to cancel a note and 
mortgage on the ground that the instruments were executed for an 
illegal consideration. The note and mortgage were given by the 
complainant to the agent of a telegraph company upon his promise 
to stop prosecution against the complainant's son for embezzling 
the company funds. Held, that the note and mortgage were given 
for an illegal consideration and were both void. 

Combinations to raise prices. An agreement or contract 
or combination to raise the prices of articles needed by the 
public is void. An attempt to ^^ corner ^^ a product is one 
example of an illegal agreement of this kind, since a ''cor- 
ner'^ raises the price. 

Foss vs. Cummings, 149 111. 353, was an action charging the 
defendants with certain items amounting to several thousand dollars 
profits and commissions in the purchase and sale of grain. The 
transaction out of which the plaintiffs' claim arose was an unlawful 
agreement or combination in which the plaintiffs acted as the 
brokers or commission men for the defendants in handling an 
immense amount of cash corn which would have otherwise come 
into the market for sale. In denying a recovery the court held that 
the agreement was an attempt to corner the Chicago market in 
relation to corn, and that the law condemns such a combination and 
forbids the courts to lend their aid to those engaged therein. 

In Craft vs. McConoughy, 79 111. 345, it was held that a contract 
entered into in the form of a partnership between the grain dealers 
of a particular locahty, the true object of which is to form a secret 
combination which will stifle competition and enable the parties to 
control the price of grain in the town, is in restraint of trade and is 
void as against pubhc pohcy. 

Hindering bidding at public sale. An agreement where- 
by one party binds himself not to bid at a public sale is 
void. It is a fraud. 



CONTRACTS 55 

In Ingalls vs. Rowell, 149 111. 163, Ingalls entered into an agree- 
ment with prospective bidders at an administrator's sale whereby the 
bidders were either to be absent, or, if present at the sale, were 
not to take part in the bidding but were to mingle with the by- 
standers and talk down the land so as to enable Ingalls to purchase 
with a low bid. Ingalls was then to sell to said prospective bidders 
at the price paid by him. In an action by the heirs the court set 
aside the sale because there was no competitive bidding. 

Usury. Usury is lending money at an unlawful rate — a 
rate higher than the law allows. 

In Illinois the maximum rate is seven per cent. If more 
than seven per cent is charged the contract is valid but all 
the interest is forfeited. 

Influencing legislation. An agreement whereby a legisla- 
tive body is to be influenced is void. ^^Legislative body'' 
includes Congress, the Legislature at Springfield, or any 
other of the lesser groups such as a city council or a town 
board. 

Crichfield vs. Bermudez Asphalt Paving Co., 174 111. 466, was a 
suit on a contract between the Crichfields and the Paving Com- 
pany, whereby the Crichfields were to use their influence to promote 
the use of asphalt in the paving of streets in the city of Chicago. 
The contract was held illegal as being a '4og-rolling" or ^'lobb^dng" 
contract to obtain favorable action by the city council for the 
benefit of a private concern and not merely for the improvement of 
the streets of the city. 

Agreements in restraint of trade. The test as to whether 
or not contracts in restraint of trade are valid or void is 
this, '^Is the restraint reasonable?'^ If the agreement 
deprives the public absolutely of the services and abilities 
of its citizens it is void. It is a distinct disadvantage to the 
community to lose their services and it also tends to 
promote monopolies. But if the restraint is partial it may 
be vahd. 



56 CONTRACTS 

In Union Slrawhoard Co. vs. Bonfield, 193 111. 420, the defendants 
who sold their interest in the business of manufacturing certain 
kinds of strawboard and paper promised the purchaser that they 
would not, for twenty-five years, engage in such business ''in the 
State of Illinois, or anywhere else where so doing may conflict with 
the business interests or diminish or lessen the profits" of the 
purchaser. In an action for breach of the covenant it was held that 
the promise was void as being an unreasonable restraint of trade. 

Andrews bought a newspaper from Kingsbury and entered into 
a contract whereby the latter was not to take up newspaper work 
in the city of Olney for five years. The court held (in Andrews vs. 
Kingsbury J 212 111. 97) that this was reasonable. 

In Linn vs. Sigshee, 67 111. 75, the court held that an agreement 
whereby a doctor would not practice medicine in a township or with- 
in six miles of his present residence, was reasonable. 

In Ryan vs. Hamilton, 205 111. 191, a physician's promise not to 
practice within eight miles of Viola, Illinois, was held valid. 

Hursen vs. Gavin, 162 111. 377, was a suit to restrain the de- 
fendant from engaging in the livery and undertaking business in the 
city of Chicago. The defendant, who had sold his business to the 
complainant, promised not to engage in such business in the city of 
Chicago for a period of five years. Held, that the agreement was 
valid as being only a partial and reasonable restraint of trade for the 
protection of the purchaser, and that a violation of the agreement 
could be enjoined. 

CONSIDERATION 

Defined. According to Blackstone consideration is 'Hhe 
material cause which moves a contracting party to enter 
iiito a contract.'^ 

Consideration has also been defined as a benefit to the 
promisee or a loss to the promisor. 

Kinds of consideration. Consideration is of two kinds : 

1. Good, 

2. Valuable. 



CONTRACTS 57 

Good consideration. Good consideration is ^^ natural 
love and affection " such as exists between father and child, 
between brothers, or blood relatives. It is sufficient con- 
sideration for contracts between such parties. 

It supports executed contracts. But it will not be 
sufficient consideration to enforce executory contracts. A 
promise to give a present may be an unexecuted promise 
based on love and affection. But if the party fails to 
deliver the present the other party cannot compel him, 
by law, to do so. But when he has delivered the property 
the contract is executed and it cannot be set aside. 

In Oliphant vs, Liversidge, 142 111. 160, the father gave a deed 
to his children but later tried to have it set aside because there was 
no consideration. It was held that natural love and affection was 
good consideration and the deed was valid. It is natural that the 
father w^ould provide for his children. ^'Ib is what parental feelings 
of good men prompt them to do; it is what just men commend and 
the law tolerates.'' 

In Williams vs. Forbes, 114 111. 167, the evidence showed that 
there was no consideration for a note given by an aunt to her niece, 
other than the consideration of love and affection, although the note 
recited it was given in consideration of the performance of personal 
services. The Appellate Court found as a matter of fact that the 
note was supported by no valuable consideration, and the Supreme 
Court, under such finding, held that the note was a mere promise 
to make a gift and that the aunt could not be required to pay it. 

A gift requires no consideration but it must be delivered 
in order to be valid. 

In The People vs. Johnson, 14 111. 342, Johnson was told by 
Snyder to give some of the latter's money to a half-brother of 
Snyder in St. Louis, and Johnson agreed to do so but had not de- 
livered it. The court held there was no gift as a gift of personal 
property is incomplete without delivery. 

In Richardson vs. Hadsall, 106 111. 476, Hadsall wrote on the 
back of a mortgage, '' I hereby agree to allow M. R., wife of A. R., a 



58 CONTRACTS 

niece of mine, $1200 in my will." The court held that this showed a 
clear intent to make a gift in the future but so long as there was 
something yet to be done it was not a valid gift. 

A written promise to make a gift to a charitable institu- 
tion is binding if acted upon. 

In Beatty vs. Western College, 177 111. 280, Mary Beatty signed a 
written promise to pay a sum of money to a college. She gave the 
college the money and it was to pay her a certain amount each year 
as long as she lived. The court held this a valid gift and she could not 
allege want of consideration after the college had spent money on the 
faith of her promise. 

Valuable consideration. A valuable consideration is 
that consideration which is of a pecuniary nature. It 
upholds both executed and executory contracts. 

Unless the contrary is mentioned we are dealing with 
valuable considerations. 

Consideration necessary. What consideration is neces- 
sary for executed and executory contracts has already been 
explained. A mere promise to do a favor is not enforceable. 
It must not be forgotten that consideration is necessary. 

In Pope vs. Dodson, 58 111. 360, a son deeded property to his 
father and the father gave the son a promissory note, but the 
evidence showed that there was no actual sale of the property to the 
father and that the note was given merely as a matter of con- 
venience. Held, that the note could not be collected by the son 
either from the father or from his estate after his death. 

Not every promise is sufficient consideration for another 
promise, but some promises are sufficient. 

In McFarlane vs. Williams, 107 111. 33, McFarlane signed a 
written promise that, in consideration of the efforts of Williams 
to purchase certain property for him, he would give Williams a 
lease of the property for a certain term, provided, of course, that he 



CONTRACTS 59 

was successful in purchasing the property. The instrument signed 
by McFarlane stipulated the amount of rent Williams was to pay, 
and in a suit by him to enforce performance of the contract the 
court held that the acceptance of the instrument by Wilhams, 
although it was not signed by him, made it binding on both parties 
and entered a decree for specific performance. In the language of 
the opinion: *^The promise to pay rent was a sufficiently valuable 
consideration for the promise to lease." 

A seal imports a consideration. A seal is said to signify 
or import a consideration. If a contract is under seal the 
court presumes there is consideration until the contrary 
is shown. 

Evans vs. Edwards^ 26 111. 279, was a suit on a bond under 
seal. The Supreme Court held that the seal on the bond im- 
ported a consideration and that it was not necessary to aver any 
other. 

Negotiable instruments import consideration. A nego- 
tiable instrument is a bill, note, or check. It is a writing 
that may be transferred : 

1. By indorsement and delivery, or in some cases, 

2. By delivery alone, 

so that the party receiving it gets the legal title. 

Consideration in a negotiable instrument contract, like 
any other contract, is necessary. Every negotiable instru- 
ment imports a consideration. 

Stacker vs. Hewitt, 1 Scam. 207, (2 111.) was a suit on a prom- 
issory note. The note was under seal, which imported a con- 
sideration, but the court further stated that ^'a note not under 
seal, expressing on its face to have been given for value received, 
imports a sufficient consideration, and leaves it open to be dis- 
proved by the defendant,'' and the production of evidence to sup- 
port a plea of no consideration is upon the defendant. 



60 CONTRACTS 

Forbearance is sufficient consideration. Where a party 
has a legal right but agrees not to exercise the right and 
does not exercise it, his promise is sufficient consideration 
to support the contract. 

In Parker vs. Ensloiv, 102 111. 272, the defendant kept a grocery 
store and on the counter he kept a large box of smoking tobacco for 
the use of the public. For a joke he put powder in the box with the 
tobacco and when the plaintiff helped himself to a smoke an ex- 
plosion resulted which injured his eyes. To settle any claim for 
damages the defendant gave the plaintiff a promissory note for 
$1000. In an action on the note it was held that the plaintiff's 
forbearance to sue was a sufficient consideration. 

Compromises of doubtful claims. Because the law 
favors settlements and looks with disfavor upon disputes 
and lawsuits, a compromise is held to be sufficient con- 
sideration to support, or uphold a contract. 

Honey man vs. Jarvis, 79 111. 318, was a suit on a promissory 
note which was given in settlement of a claim against a guardian 
who had sold his ward's land and, it was alleged, had not accounted 
for the balance remaining in his hands after the appropriation of 
the necessary funds for the purpose for which the land was sold. 
Held, that the compromise of the claim was a sufficient consideration 
for the note, whether the maker of the note was liable or not, provided 
the claim was not so unfounded and absurd as to raise a presumption 
of fraud. 

In McKinley vs. Watkins, 13 111. 140, the plaintiff had traded 
horses with the defendant, and a month or two after the trade, the 
horse which the plaintiff got died. The plaintiff informed the de- 
fendant of the death of the horse and claimed that it was diseased 
at the time of the trade. The defendant then promised to pay the 
plaintiff fifty dollars or let him have a fifty-dollar horse, if he would 
not sue him for damages. In an action to recover the fifty dollars it 
was held that the promise not to sue was a sufficient consideration for 
the promise to pay the money, and that it was immaterial whether 
the plaintiff could have recovered the damages for the death of the 
horse if the plaintiff in good faith believed he had a right of action. 



CONTRACTS 61 

Especially do courts favor settlements of all family dis- 
putes and look with favor upon compromises of family 
quarrels. 

In McDole vs. Kingsleyj 163 111. 433, a father in his will gave his 
real property to his daughters, but to his sons he gave only personal 
property. However, the sons claimed that their father had verbally 
given them certain parts of the land on which they lived and had 
made improvements. To settle the controversy all the children 
agreed to divide the land according to the terms of a certain instru- 
ment which they all signed. The court upheld the compromise agree- 
ment. 

Courts will not look into the sufficiency of consideration. 
As a general rule, courts will not look to discover whether 
the consideration is adequate or not. If the parties were 
satisfied at the time and thought the consideration was 
sufficient the courts will not say it is not sufficient. If the 
parties get what they contract for, that is all they are 
entitled to get. 

There are some exceptions to this rule. 

In McArtee vs. Engarty 13 111. 242, Abraham Lincoln, representing 
the complainant, alleged that the complainant had conveyed his 
property for an inadequate consideration and asked the court to 
set aside the deed. The court held that although the land was sold 
for much less than it was worth relief could not be obtained on that 
ground, but that inadequacy of consideration could be considered 
in determining whether the conveyance was obtained through im- 
proper influences or by fraud. The complainant was an ignorant, 
weak-minded man, addicted to the use of intoxicating liquor, and 
the conveyance was obtained while he was in necessitous circum- 
stances and under the influence of whiskey furnished by the de- 
fendant; and the deed was allowed to be set aside because of the 
fraudulent practices. 

Doing what one is legally obliged to do. There is no 
consideration when one does what he is already legally 
bound to do. 



62 CONTRACTS 

In City of Decatur vs. Vermillion, 77 111. 315, the city appointed 
Vermillion as pound-master. At the same time he was commis- 
sioned as a special policeman so as to enable him to lawfully overcome 
opposition or difficulty in his work. He brought suit against the 
city for salary as a policeman in addition to the salary allowed him 
as pound-master. The court held he was bound to perform the 
duties of a pound-master and was made a policeman only to assist 
in performing those duties, so he could not legally claim extra pay. 
A contract allowing pay for doing what a man is legally bound to 
do is void for want of consideration. 

Past consideration is no consideration. When a party 
agrees to do an act in the future because of what the 
other party did in the past there is no consideration 
except in a few cases where the first act was performed 
by request. 

Carlock sells Meeker a farm and executes a quit-claim 
. deed. A year later he tells Meeker that he is willing to 
execute a warranty deed instead. Meeker cannot compel 
him to execute it, because the consideration is past con- 
sideration. 

In Carson vs. Clark y 1 Scam. 113, (2 111.), a party, without right, 
entered upon land belonging to the United States government 
and made improvements thereon. Subsequently, another party 
purchased the land from the government and promised the party 
who had made the improvements that he would pay him for the 
improvements. Held, that the promise was not binding. The land 
with the improvements, passed to the second party by the sale 
from the government. His promise, then, to pay for that which he 
had already paid, was without consideration. 



WRITING REQUIRED 

Explanation. In some cases a contract cannot be sued 
upon unless it is in writing. In other cases the contract is 
void. 



CONTRACTS 63 

Parliament in England in 1676 passed a ^^ Statute of 
Frauds'^ which was to prevent ^^many fraudulent prac- 
tices which are commonly endeavored to be upheld by 
perjury.'' 

These contracts are unenforceable unless in writing and 
properly signed. Responsible business firms do not seek 
to evade their just contracts by taking advantage of this 
Statute. Lawyers consider it unethical to set up the 
Statute unless the claim is unjust. But man}^ unscrupu- 
lous people have taken advantage of it to defraud others 
and it has been asserted that it has caused more fraud 
than it has prevented. 

The State of Illinois has reenacted — with slight varia- 
tions — ^two sections of the English Statute of Frauds, the 
Fourth and the Seventeenth. 

Fourth Section. This section provides, that: 

^^No action shall be brought: 

* ^ 1 . Whereby to charge an executor or administrator upon 
any special promise to answer for a debt or damages out of 
his own estate, or 

^^2. Whereby to charge the defendant upon any special 
promise to answer for the debt, or default of another per- 
son, or 

'^3. To charge any person upon any agreement made 
in consideration of marriage, or 

^^4. To charge any person upon a contract for the sale of 
real estate or any interest in or concerning the same for a 
longer period than one year, or 

^^ 5. Upon any agreement not to be performed within the 
space of one year; 

unless the promise or agreement upon which such action 
shall be brought is in writing, and signed by the party 
to be charged or his agent." 



64 CONTRACTS 

If the contract is performed it does not apply. If all the 

terms of the contract are carried out the Statute does not 
apply. The Fourth Section does not say the contracts are 
invalid. It says no action can be brought. 

In James vs. Morey, 44 111. 352, the defendant was a tenant 
of the plaintiff and was in his employment as clerk. The plaintiff 
promised the defendant that if he would get married within a year 
he would give him $1000, a promise which the Statute of Frauds 
required to be in writing. The defendant got married and the 
plaintiff gave his wife a lot worth $500. The defendant allowed the 
rent to run on the premises which he leased of the plaintiff until 
over $500 was due and then credited himself on the books of the 
plaintiff with that amount as the balance of the one thousand. In 
an action for the rent the court held that the evidence showed that 
the promise had been completely performed and that the Statute of 
Frauds did not apply. 

Who must sign? It is only necessary to have one party 
sign the contract, before the other party brings suit. The 
party to be charged, or his agent, must have signed. It is 
immaterial whether the plaintiff signed. 

Farwell vs, Lowther, 18 111. 252, was a suit on a contract to convey 
land. It was held that a contract for the sale of real estate, if signed 
by the party to be charged, will satisfy the Statute of Frauds. But 
the written offer must contain all of the terms of the contract and the 
acceptance must be unconditional. 

While the case above states that all the terms must be 
included yet the consideration need not be in writing. 
(Smithes Illinois Statute, 1921, p. 1022.) 

Signature. The signature is usually the party's name 
written out in his own handwriting, and may be in pencil 
or in ink. But it may be printed or even stamped or type- 
written. Whatever mark a person makes for his name is 
sufficient. 



CONTEACTS 65 

In Weston vs. Afyers, 33 111. 424, the defendant signed ])aj)ers 
with his initials, ^'H. C. M." The court held it made no difference 
how he wrote his name, but when a party adopts a signature of any 
kind as his, he is bound. 

Special promises of executors and administrators. An 

executor or administrator is bound to pay the debts of 
the estate he administers, out of the funds belonging to 
the estate. However, he may promise to pay a debt out of 
his own estate. To compel him to pay in this latter case 
there must be written evidence of the promise. 

Debts, defaults and miscarriages of other parties. 
Whenever one party contracts to pay the debt of anothei* 
party, or agrees to be responsible if another does not do 
his work in a satisfactory manner, there must be written 
evidence to compel enforcement. 

But if Clark says to the store keeper, ''Give Jones a suit 
of clothes and I will pay you, '^ we have an example of a 
contract between Clark and the store keeper, just as if 
Clark had said ^^Give the suit to the messenger boy to be 
delivered and I will pay you. ^' It is not within the Statute. 

However, if Clark says to the store keeper, ^'Give Jones 
a suit of clothes and if he doesn't pay you I will, '^ the con- 
tract is between the store keeper and Jones and Clark is 
agreeing to answer for the debt of another. This contract 
is within the Statute and must be in writing to be enforced. 

In Geaj-y vs. O'Neil, 73 111. 594, O'Neil sued for goods sold. 
David Geary claimed the goods were charged to him but were 
purchased by and for his brother. The court held that the question 
was whether credit was originally given to David Geary or his 
brother. Although the goods were delivered to the brother, yet David 
Geary would be liable if given at his request. 

Consideration of marriage. By ''an agreement made 
in consideration of marriage'^ is not meant the promise 



66 CONTRACTS 

of Catherine Black to marry Roger Bates. It means the 
promise of one party to give property to the other if she 
will marry him. 

In Mc Annuity vs. McAnnultyy 120 111. 26, it was alleged that a 
wife before marriage, gave up, for a valuable consideration, all 
interest in her husband's property in case she survived him. The 
evidence showed that there was only a verbal agreement entered 
into and it was held that the subsequent marriage did not take 
the case out of the Statute which required that such an agreement 
be written. The marriage revoked a prior will of the husband and 
the widow was allowed to share in his estate. 

Contracts involving real property. Contracts for the sale 
of any interest in real estate except leases for less than 
one year must be in writing before they are enforceable. 
Before trees are cut they are realty. After they are cut 
they are personalty. Interests in coal mines are realty. 
Therefore contracts for their sale must be written to be 
enforced. 

Contracts not to be performed within one year. A 
contract which may be performed within one year — 
even though it probably will not be — is not one of this 
class. Uncertainty of time takes the contract outside the 
Statute. 

Parker agrees to support his uncle as long as he lives. 
The uncle may die in two months, therefore it is not a con- 
tract 'Ho be performed within the space of one year. '' The 
fact that he actually did live 20 years has nothing to do 
with the case one way or the other. The point is, it might 
have been performed within one year. 

An agreement to work for one year, commencing at 
some future time cannot be completed w^ithin a year 
from the '^ making'' thereof, so must be in writing to be 
enforceable. 



CONTRACTS - 67 

In Haynes vs. Mason, 30 111. 85, Mrs. Mason agreed March 
26, 1885, to work for Mrs. Haynes for one year commencing March 
30, 1885. The court held that Mrs. Mason could not recover, the 
contract not being in writing. 

Seventeenth Section. The Legislature at Springfield in 
1915 passed — ^with modifications — the 17th Section of the 
Enghsh Statute of Frauds. 

It provides that a sale of any goods of the value of $500 
or upwards shall not be enforceable unless : 

1. The buyer accept part of the goods and actually re- 
ceive the same, or 

2. Give something as a forfeit to bind the contract or in 
part payment, or 

3. Some note or memorandum in writing of the contract 
be signed by the party to be charged or his agent. (Uni- 
form Sales Act.) 

It should be borne in mind that only one of these three 
conditions need be complied with, to make the contract 
enforceable — ^that the sale is valid if the buyer accepts 
part of the goods and actually receives the same, or gives 
something as a forfeit to bind the contract or in part pay- 
ment, or the provision as to the writing is complied with. 



CONTRACTS ARE BINDING 

Importance. Contracts are legally binding on the parties. 
Once the terms are agreed to neither party can withdraw 
without the consent of the other. If a party makes a con- 
tract that proves a hardship he is still bound just as the 
other party would have been bound if it had been a fortu- 
nate enterprise. No excuse will relieve him. This cannot 
be too strongly emphasized. 



68 CONTRACTS 

As one court said (in Phillip vs. Stevens, 16 MaSvS. 238) 
difficulty or hardship is no reason why a party should not 
carry out his contract, because the injured party could 
have made an exception in his contract covering such con- 
ditions. The courts do not usually protect men from 
their carelessness or ignorance. The former (carelessness) 
they must cure; the latter (ignorance) they must provide 
against by asking counsel. Any lawyer, in any village 
of the commonwealth, could have stated the hazard, 
and would have guarded against it, by introducing an 
exception. 

The master of a ship agreed to sail from Charleston to 
Rotterdam but later refused to go because his ship might 
have been seized by Napoleon. He was liable on his con- 
tract. 

A party agreed to build a bridge and keep it in repair 
for a specified time- Before the time was up an extraor- 
dinary flood carried it away. He was compelled to build 
a new bridge. 

Summers vs. Hihbard & Co., 153 IlL 102, was a suit for failure 
to deliver a certain quantity of sheet-iron which the defendants 
contracted to sell. The defendants alleged that breakages of machin- 
ery in their factory rendered it impossible to manufacture the sheet- 
iron. Held, that accidents in the factory would not excuse the non- 
performance of the contract. 

But where it is known that parties made a contract with 
the idea that a certain thing would remain in existence and 
it is no longer in existence the rule is otherwise. 

In Walker vs. Tucker, 70 111. 527, parties leased a coal mine and 
agreed to work it as long as they had the lease. They mined all the 
coal before the lease expired. The court held that since both parties 
expected the supply to last and made their contract on that basis, 
both were mistaken and the defendants were not liable. 



CONTRACTS 69 

Also, when the services are of a personal nature an 
exception is made and the party who cannot perform be- 
cause of sicloiess or insanity or death is not liable on the 
contract. 

In Campbell vs. Potter j 147 111. 576, a son in consideration of a 
conveyance of property contracted to support his father. After 
the death of the son during the lifetime of the father, the court 
refused to compel performance of the son's contract by his personal 
representative, on the ground that the contract required the personal 
services of the son and upon his death became impossible of per- 
formance. 

REMEDIES 

Two remedies. If one of the parties refuses or neglects 
to carry out his part of the agreement the other party has 
one of two remedies to pursue. The remedies are: 

1. Damages, 

2. Specific performance. 

If money alone will repay the injured party he must 
sue for damages. 

But when money damages do not constitute a plain, 
adequate and complete remedy the party may ask for 
specific performance. Specific performance of a contract is 
performance of the contract according to its exact terms. 

Rand agrees to sell Cochrane an autographed picture of 
Ex-President Grant. No other picture will satisfy Coch- 
rane. If Rand does not carry out his contract, Cochrane 
will not be satisfied with money damages, so he will sue in 
specific performance and Rand will be compelled to deliver 
the picture. 

In McMullen vs. Vanzantj 73 111. 190, the court compelled 
the maker of a note who had destroyed it, to make out a new 
one and thereby made him specifically carry out his agreement. 



70 CONTRACTS 

But a court will not order specific performance of a con- 
tract that is not just. Nor will it aid in the enforcement of 
a contract that is against public policy, when specific 
performance is asked. 

In Marsh vs. Faifbury^ Pontiac and Northwestern R. R. Co., 
64 111. 414, John L. Marsh brought suit to enforce the specific 
performance of a contract made with the raihoad company, ^Ho 
locate passenger and freight depots of said road in Marsh's addition 
to Fairbury and at no other point in said town." The court refused 
because the location of railroad depots is a matter of public concern 
and should not be controlled by a private party. 

McClurken vs. Detrich, 33 111. 350, v/as a bill filed for the specific 
performance of an agreement to deliver the complainant a certain 
number of shares of stock in a corporation in case Abraham Lincoln 
received the electoral Vote of Illinois for president in the election of 
1860. The complainant made a like promise if Stephen A. Douglas 
received the Illinois vote. The court refused to grant specific per- 
formance of the contract because it was a wager. 

DISCHARGE OF CONTRACT 

Ways. Contracts may be discharged in any of the 
following ways : 

1. By performance, 

2. By agreement, 

3. By breach, at the option of the injured party, 

4. By operation of law. 

1. Discharge by performance. When the terms of the 
contract have been fulfilled the contract is discharged. If 
money is to be paid to fulfill the terms the party must offer 
legal tender to constitute absolute payment. 

Legal tender. Legal tender is money which Congress 
has declared must be accepted as payment of undisputed 
debts, unless the contrary intent is shown. 



CONTRACTS 71 

The following are legal tender: 

1. Gold (any amount). 

2. Silver dollars (any amount). 

3. Silver, less than dollars, up to $10. 

4. Other coins, up to $0.25. 

5. United States Treasury notes, any amount. 

6. United States notes, any amount, except for import 
duties and interest on the pubUc debt. 

The following are not legal tender; although they pass 
as such in business dealings. 

1. Gold certificates. 

2. Silver certificates. 

3. National bank notes. 

4. Federal reserve notes. 

Payment by negotiable instrument. In Illinois the pay- 
ment of a debt by a negotiable instrument is usually con- 
ditional only and if the instrument is not paid, the party 
can sue upon the original debt. 

In Stevens vs. Park, 73 111. 387, it was held that the acceptance of 
a bank check is not an absolute payment of a debt, but is only a 
conditional payment. But the burden is on the holder of the check to 
present it for payment within a reasonable time. If he fails to 
receive payment for any reason, he must show that it was through 
no fault of his. 

In Peoria and Pekin Union Ry. Co. vs. Buckley, 114 111. 337, a 
contract was made for the sale of grain at a warehouse, for cash. 
The purchaser gave a check for the price and the check was dis- 
honored by the bank on which it was drawn. Held, that the title 
would not pass before payment of the price and the giving of the 
worthless check did not constitute payment. 

But in Bailey vs. Pardridge, 134 111. 188, it was held that if a check 
is given for goods purchased and payment for the goods is receipted 
the check is accepted as cash and must be regarded as absolute 
payment. 



72 CONTRACTS 

Payment of a debt by tendering counterfeit money is 
not such a payment as will discharge the party bound, even 
though it be accepted by the other party. 

2. Discharge by agreement. When both parties agree 
that the contract shall be discharged it is no longer binding 
upon either of them. 

If the parties agree to substitute a new contract for the 
original one the original one is thereby discharged. 

In Bishop vs. Basse, 69 111. 403, a contractor agreed to furnish 
materials and erect a building, but owing to a rise in prices he was 
unable, without great loss, to comply with the contract at the 
price agreed to be paid. He informed his employer that he would not 
comply with the contract, but the employer directed him to go on 
and finish the work and he would pay him what was right for it. 
Held, that the new agreement was based on a sufficient consideration 
because of the mutual promises and was a vahd substitution for the 
old contract. 

3. Discharge by breach. As a general rule whenever 
one of the parties breaks the contract the other party may 
be discharged. 

When the party declares he no longer will be bound by 
the contract the other party may consider this as a dis- 
charge. 

In Collins Ice Cream Co. vs. Stephens y 189 111. 200, Stephens was 
in the employment of the ice cream company as a sales man- 
ager. In an altercation with the president of the company he 
told the president that if he was not given a desk in a new office 
established by the company he would ^^quit right there.'* The 
president said ^'AU right," but the next day Stephens returned 
to work as usual and the company made no objection to his 
services. Held, that the words used in the altercation would have 
amounted to an ending of the contract of employment but the 
subsequent conduct of the parties caused the contract to remain 
in force. 



CONTRACTS 73 

4. Discharge by operation of law. The contract may be 
discharged by operation of law by: 

1. Bankruptcy, 

2. Merger, 

3. Alteration of written contract. 

Bankruptcy. In 1898 Congress passed the present Bank- 
ruptcy Act which provides that when a party cannot pay 
his debts he may be declared a bankrupt and his contracts 
and debts will be discharged. (There are a few exceptions 
to this rule.) 

Merger. When a security of a higher nature is sub- 
stituted for one of a lower nature the one of a lower nature 
is discharged. To illustrate, if a contract under seal is 
substituted for a contract not under seal the latter is 
discharged. 

Alteration of written contract. When one party in- 
tentionally changes a material part of a written contract 
the other party may be discharged at his option. 

Examples of this are : 

1. Increasing the interest on a note, 

2. Changing the time of payment. 

But an alteration by mistake will not discharge the 
original contract. 

LOSS OF RIGHT OF ACTION 

How right of action may be lost. The right to recover 
when the contract has been broken may be lost by any 
one of the following ways: 

1. By a release, 

2. By accord and satisfaction, 

3. By judgment, 

4. By the Statute of Limitations. 



74 CONTRACTS 

1. Release. A release by one party is valid if there is 
consideration. A release is a contract which provides that 
the party gives up his claim. 

In Mills vs. Larrance, 186 111. 635, a claim was filed for property 
due but later this was released by a writing under seal. The court 
held that it was not necessary to allege consideration because of the 
seal. 

2. Accord and satisfaction. Accord and satisfaction 
agreed upon as a settlement of a disputed claim which, 
when performed, is a bar to all actions upon this account. 
It may be accomphshed in either of two ways: 

1. By a compromise of an amount in dispute, 

2. By the substitution of a new agreement for the old 
one. 

Richardson claims Kirkpatrick owes him $100.00 and 
Kirkpatrick claims the amount is only $50.00 but they 
compromise by agreeing $75.00 is to be paid. This is accord 
and satisfaction. 

In Yates vs, Valentine, 71 lU. 643, it was held that a promissory 
note given in Heu of another will be a complete satisfaction of the 
first if the subsequent note is executed and accepted for that pur- 
pose. This is another example of accord and satisfaction. 

3. Judgment. The judgment by a proper court will 
discharge the contract. 

4. Statute of Limitations. The law sets a time limit, 
within which suits must be brought. A suit not com- 
menced within that time cannot be brought at all. The 
reason for this is that courts look with disfavor upon old 
claims. Witnesses may die, move out of the State, or 
forget many of the details of the questions involved and 



CONTRACTS 75 

justice will not be as sure to prevail. A party must not 
^'sleep on his rights. " ''The law aids the vigilant, not the 
negligent.'^ 

In Illinois the parties must bring suit on unwritten 
contracts within five years. On written contracts the 
time limit is ten years. 

In Bonney vs. Stoughton^ 122 111. 536, the complainant brought 
suit for an accounting more than five years after the action accrued. 
The court held that the Statute of Limitations barred the action, and 
that the failure of the complainant to discover the mistake upon 
which the action was based was no excuse for the failure to bring 
suit within the required time but rather showed a want of diligence. 

But the time is not counted when the defendant is out 
of the State. 

In Wooley vs. Yarnellj 142 111. 442, the defendant was sued 
on his promissory note. At the time the note became due he was 
a resident of lUinois but he subsequently removed and resided 
in another State for a period of time. Held, that the Illinois statute 
provided for a deduction of the time of the residence in the foreign 
State and he could be sued when he returned. 



TRANSFER OF CONTRACTS 

Assignment of contracts. The general rule is that only 
the parties who have made a contract can acquire any 
rights or are required to assume any liabiHty under it. 

A contract requiring special skill can not be assigned 
(transferred). A teacher is employed to teach a year. He 
can not give his contract to another and let the latter 
teach in his place. 

Neither can a contract requiring personal services be 
transferred usually. McMurry hires Bailey to act as his 
traveling companion. Bailey cannot give his contract to 



76 CONTRACTS 

Corbett nor give any rights to Corbett and have Mc- 
Murry bound on it. 

An exception to the general rule exists in the case of 
a negotiable instrument (see Negotiable Instruments, 
p. 157). 

A contract between two parties for the benefit of a third 
party may be sued upon by the third party. 

The court held in Dean vs. Walker y 107 111. 540, that ''it is a 
familiar rule, and one well established by authority, that where one 
person, for a valuable consideration, makes a promise for the 
benefit of a third person, such third person may maintain an action 
upon it." 

QUESTIONS ON CONTRACTS 

1. Define a contract. 

2. Explain the difference between an executed and an executory 

contract. 

3. Give an example of a contract executed on one side and execu- 

tory on the other. 

4. What is an express contract? 

5. Illustrate what is meant by an implied contract. 

6. Must contracts be written to be valid? 
- 7. Why should all contracts be written? 

8. Why were all contracts originally under seal? 

9. What is a seal? 

10. Define: 

1. A valid contract, 

2. A voidable contract, 

3. A void contract. 

11. Name the essentials of a valid contract. 

12. Why was there no contract in the case of Genl vs. The In- 

surance Co f 

13. Why does the law permit an infant to disaffirm his contracts? 

14. Why must he disaffirm within at least three years? 

15. Parks says he is 21 years old and looks that old. A clothier 

believing him that old sells him clothes which are not 
necessaries. Can Parks avoid the contract? 



CONTRACTS 77 

16. Nelson, an infant, makes a contract. Two years after be- 

coming of age he accepts the benefits of the contract, and 
says he will affirm that part of the contract. Can he or can he 
not affirm part? Why? 

17. What is meant by the statement that the law aiding infants 

must be used ^'as a shield rather than a sword"? 

18. Can anyone disaffirm for an infant while he is alive? 

19. Who may disaffirm for him after his death? 

20. Welch, an infant, buys an automobile. After becoming of 

age he sells it to Dolan. Is this a ratification? Why? 

21. A student, the son of a poor man, buys six silk shirts. Are 

they necessaries? Why? 

22. A medical student, the son of a poor man, buys $100 worth 

of doctors' instruments. Are they necessaries? Why, or 
why not? 

23. A minor who is barely able to read English buys a Latin gram- 

mar. Can he disaffirm on the ground that it is not a necessary? 

24. I. D. Kingsberry sold two golf sticks to an infant who was a 

member of two country clubs and wealthy. Is the sale a 
valid one? 

25. What is the rule as to the contracts of insane persons? 

26. Watson had been drinking for several days and then entered 

into a contract to sell his house. What determines whether 
the contract is vahd or not? 

27. Wright agrees to sell his house for $4,000 if Purdum will assume 

a mortgage of $2,000. Purdum did not understand that he 
was to assume the mortgage. Is there a contract? Why? 

28. Why wasn't there a contract in Shipley vs. Carroll? 

29. What determines whether an offer can be withdrawn? 

30. Carpenter agrees to keep an offer open two weeks. At the 

end of one week he sells to another. He is sued on the agree- 
ment. Can the other party recover? 

31. In the above question suppose Carpenter was paid $10.00 to 

keep the offer open. Can the other party recover? 

32. Green agrees to sell Crandell his house for $5,000. Crandell 

says he will ^' think it over.'* Six weeks later Crandell says 
he will accept the offer. Has the offer lapsed? Why, or 
why not? 

33. Harrison offered Barry a contract to sign. Before Barry 

accepted the offer Harrison became insane. Can there be a 
contract? Give reason. 



78 CONTRACTS 

34. Finch told Nicols he would sell him his farm for $42,000. 

Nicols said, ''I'll take it if you will take $17,000 on a mort- 
gage.'' Is there a contract? Give reason. 

35. Suppose in the above case, Nicols said, '^ I'll take it if you will 

give me immediate possession." Is there a contract? Give 
reason. 

36. Dean sent Graham an offer by mail. Graham telegraphed his 

acceptance, but the telegram was not received. Was there a 
contract? Give reason. 

37. Van Steel said, ''if you don't telephone me by seven tonight 

I'll consider the offer accepted." Pow^ell said, ''that's a 
bargain.*' Powell tried to telephone by seven but his tele- 
phone was out of order. Is there a contract? 

38. Brady said, " you take the book if you want it and pay me to- 

morrow." Garrison took the book. Was there a contract? 

39. Warner said, "I'll buy some of your corn for $1 a bushel." 

Cline said, "It's sold." Is there a contract? 

40. The owner of a mill offers $500 for information leading to the 

arrest of the persons who robbed his mill. Clark gives the 
information to McMurry who tells the owner. Is Clark 
entitled to the reward from the owner? 

41. Walters, a policeman, arrests a man for whom a reward has 

been offered for murder, and turns him over to the proper 
parties. Can he recover the reward? Give reason. 

42. Price sells a tax title for $350. He said the title was good. 

It was worthless. Can the buyer recover from Price? 

43. Carlson who was unable to read without his glasses signed a 

contract involving $1000. He understood he was signing a 
contract for services but was not sure as he did not have his 
glasses with him. It was a promissory note. Can he avoid 
the contract? 

44. Martens told Kyle his house cost $6,500 but that he would sell 

it for $6,000. Kyle knew it cost just $5,500 but bought 
the house. Learning he made a poor contract he sought to 
avoid the contract on the ground of misrepresentation. Can 
he avoid it? 

45. Harman told Bryan that his automobile was the most beautiful 

one in the county and Bryan bought it for that reason. 
Learning afterward that it was the opinion of a majority of 
those he asked that it was not the most beautiful he sought 
to avoid the contract. Could he legally avoid it? 



CONTRACTS 79 

43. Lane said he would be making $300 a month in sales for his 
employer within a year and was hired because his employer 
believed the statement. He only made $125. Could the 
employer have the contract set aside for fraud? 

47. Watson sold Dolan what he claimed was the best shoe ever 

put on the market for $8.00. It developed that the shoe 
was of inferior quality. Could Dolan recover his $8.00? 

48. Stone, an old man who relied on his son to take care of his 

business, was urged to deed all his property to the son without 
any valuable consideration. Could this contract be avoided? 

49. Wallace was told to sign a promissory note or he would be killed. 

He signed the note. Could he avoid the contract? Why? 

50. Miner and Baldwin enter into a contract to sell certain diseased 

hogs after Miner has doctored them so strangers cannot tell 
they are diseased. Baldwin sells them but refuses to divide 
with Miner who sues. Can he recover? Give reason. 

51. Dudley bet Palmer fifty dollars that Harding would be elected 

President but Palmer refused to pay. Could Dudley recover 
in a law suit? 

52. Suppose in Question 51, Palmer had paid the bet. Could he 

recover his fifty dollars? 

53. Adams entered into a contract to sell cotton to a German agent 

during the war. The agent refused to pay for all the cotton 
and Adams sued. Could he recover? 

54. Lee signed a note. The consideration was that Fairbanks 

would not testify in a trial against him. Why was this not a 
valid contract? 

55. Knox was hired for $200.00 a month to work at Springfield in 

an effort to influence the legislators to vote a certain way. 
His employers refused to pay him. Why shouldn't he be 
allowed to recover his salary? 

56. Robertson sold his medical practice to Garber, agreeing not to 

engage in such business anywhere in the United States for 
two years. Is this contract vahd? What is the test? 

57. Define consideration. 

58. Roscoe Williams agreed to give Richland a watch because of a 

favor done him a month ago. The watch was lost in the mail. 
Could Richland compel WiUiams to send him another? Why? 

59. Williams agreed to give Richland one dollar for a watch 

worth ten dollars. Is there consideration enough to support 
a contract? 



80 CONTRACTS 

60. What is meant by the statement, ^^a seal imports a con- 

sideration"? 

61. Carroll threatened to sue Roland for damages because of 

remarks made by Roland. To escape suit Roland agreed to 
pay him $1000. Is there consideration that will support the 
contract? 

62. Haines owed Long $135 but thought he only owed $112.50. 

Long agreed to take this as a compromise. After the com- 
promise if Long can prove the amount owed, can he collect 
the $135? 

63. Harley sold Miller a set of books for $250. They were not 

worth more than $75. Must Miller pay the $250? 

64. Davis was paid $50 to do certain work for Gibbs. After re- 

ceiving the money he refused to complete the work, claiming 
it was worth $25 more to do it. The other party agreed to 
pay the extra $25 but didn't pay it. Can Davis recover it? 
Give reason. 

65. Ferris agreed to give Bush $100 as a reward for favors done 

in the past. He changed his mind later. Can Bush recover? 
Give reason. 

66. What was the object of the Statute of Frauds? 

67. Give the Fourth Section. 

68. What is a sufficient signature? 

69. Newell, an executor, told Bates that a debt would be paid out 

of the estate, but if for any reason it wasn't, he (Newell) 
would pay it out of his own (Newell's) estate. What is needed 
to make the promise binding? 

70. Crane told Stafford that he would pay for a desk for Mullen 

and for Stafford to deliver it immediately. Is this valid 
without a writing? Is it enforceable without a writing? 

71. Suppose Crane told Stafford to give Mullen the desk and if 

Mullen didn't pay for it he would. Is this valid without a 
writing? Is it enforceable without a writing? 

72. A widow of a Civil War veteran was drawing a pension of $40 

a month. She would lose this pension if she married again. 
Lee offered to give her $40 a month if she would marry him. 
She agreed and they were married. Can she recover this 
amount if there was no writing? 

73. Kane agreed to sell 160 acres of land to Bradley for $250 an 

acre. They did not have' any written agreement. Is this 
contract enforceable? 



i 



CONTRACTS 81 

74. Atkinson agreed to lease Underwood one of his farms for a 

year and a half and another for six months. Need these 
contracts be in writing to be enforced? 

75. Hoyt agreed to work for Dawson as long as he was needed in 

the store. He worked for three years and quit because he 
was no longer needed. Some wages were due. Can he recover 
the wages due if there was no writing? 

76. Hughes was given $10,000 in bonds by his father on condition 

that he would support his father as long as both Hved. Is 
this contract vahd without a writing? Is it enforceable 
without a writing? 

77. Terry agreed to sell Edwards $75Ql00 worth of corn, but later 

refused to carry out his agreement. Must the agreement be 
in writing to be enforced? 

78. Give the Seventeenth Section of the Statute of Frauds as 

enacted in Ilhnois. 

79. Hayes agreed to work for Hurd for $2,000 a year. Finding out 

later that he would lose $1,500 because of some of the con- 
ditions in the contract, so he refused to carry it out. Is he 
legally bound to fulfill it? 

80. Thomas, a poor man, agreed with Wilder, a rich man, to buy a 

house on installments — agreeing that if he failed to pay any 
installment he would lose the place. Thomas was sick for a 
year, lost his job and was unable to pay the installments. 
Under these circumstances must he lose the house? 

81. What is meant by specific performance? 

82. Sterhng made a contract with Oilman whereby he was to de- 

Hver 5000 bushels of wheat. He later refused to deliver. Can 
Oilman compel him to by specific performance? Oive reason. 

83. Suppose instead of the wheat, he was to deliver an original 

painting by a great master. Would this make any difference? 
Oive reason. 

84. Name the four ways in which a contract can be discharged. 

85. What is legal tender? 

86. Darnell owed Edmonds $600 and offered him payment with 

$300 silver dollars, $100 in gold, $16 in half dollars, $11 in 
smaller coins, $28 worth of Canadian money, $25 in Federal 
reserve notes, $25 U. S. Treasury notes and a check for the 
balance. How much is legal tender? 

87. Havens receives a note in payment of a suit of clothes. Is 

the debt discharged? 



82 CONTRACTS 

88. Would the same rule hold if he received a check? 

89. Goodwin hired Cooper, under the terms of a written agreement, 

for a period of two years at $6,000 a year. Finding that 
he was losing money he told Cooper he would only pay him 
$3,000. Can Cooper treat the contract as discharged? Can 
Goodwin? 

90. Holmes owes Kellogg $1,400 for merchandise. He becomes a 

bankrupt. Is the contract discharged? 

91. Hale holds a promissory note that bears 6% interest. Thinking 

that is too much interest he changes it to 5%. This results 
in a loss to him and a benefit to the other party. Is the 
note discharged? * 

92. Suppose the maker of the above note told him to change the 

date from September 4 to September 3 and by mistake he 
wrote September 2. Does this prevent the holder from re- 
covering his money? 

93. What are the four ways in which the right of action may be 

lost? 

94. Name the two ways of having accord and satisfaction. 

95. What is the Statute of Limitations? 

96. Why was it enacted? 

97. What is meant by a party *' sleeping on his rights"? 

98. When must parties sue on unwritten contracts? On written 

contracts? 

99. What is the rule as to assigning contracts? 
100. What did the Court hold in Dean vs. Walker? 



CPIAPTER IV 

AGENCY 

Definition. Agency is the contractual relation existing 
between one party known as the Agent, who acts for and 
in the name of the other party — known as the Principal. 

Relation is a fiduciary one. Attention has already been 
called to the fact that the relation of principal and agent is 
a fiduciary relation — a relation which requires that the 
utmost good faith be exercised by both parties. Many 
transactions that would be valid with parties dealing at 
arm's length are voidable or void if the contracting parties 
are principal and agent. 

In Tyler vs. Sanborn, 128 111. 136, an agent was employed to 
sell a certain lot. He finally found a buyer whose offer of $1000 
was accepted by the agent's principals. When the agent was ready 
to deliver the deed the buyer refused to complete the transaction 
and said he did not want the property. The agent's wife then 
spoke up and said she would take the property off the buyer's hands 
if he would sell at the same price he offered to pay for the lot. He 
agreed and, without paying any money, made out a deed to the 
agent's wife and she furnished the money for the property. The 
principals then brought suit to have the deeds set aside as fraudulent 
against their rights. Held, that although there was no evidence of 
fraud, the transaction was fraudulent in law, as it was in effect a 
sale by the agent to his wife without the knowledge of the principals, 
and violated the fiduciary relation existing between the agent and 
his principals. 

Usually anyone who is competent to act for himself may 
be a principal and delegate authority to an agent. Any 
party able to perform the service may be an agent. 

83 



84 AGENCY 

Classes of agents. Agents are usually classified as: 

1. General, or 

2. Special. 

A general agent is one authorized to transact his prin- 
cipaFs business of a particular kind or in one certain 
locality. 

A special agent is one authorized to transact some speci- 
fic business under definite instructions. 

It is important to learn the difference because it is the 
usual rule, that a principal is bound by acts ^^ within the 
apparent scope ^' of the general agent's authority but not 
bound when the special agent exceeds his authority. 

Within the apparent scope of authority. By '^within 
the apparent scope of authority '^ is meant within the 
seeming extent of authority of the agent. 

A conductor on a street car, by usage, is within the 
apparent scope of his authority when he sells street car 
tickets. Would any one suggest he would be justified in 
selling the street car to a passenger? The obvious answer 
is ^^No, '^ because it is not within the seeming extent of 
his authority. The company is bound if the agent sells 
five tickets for a quarter instead of four because passengers 
are justified in believing the agent is acting under his com- 
pany's instructions. A man would be laughed out of court 
if he would suggest that the company would be bound by 
the sale of the car by the conductor. 

The agent stands in the place of his principal. The 
agent's act is the principal's. For these reasons the princi- 
pal is liable for his agent's acts in general, for ^^he who acts 
through another acts himself . " 

Creation of agency. Agency may be created for any 
lawful purpose. It may be created in any of three different 
ways : 



AGENCY 85 

1. By agreement, 

2. By ratification, 

3. By operation of law. 

1. Agency by agreement. Usually an agency is created 
by an agreement between the parties. This agreement, 
like any other, to become binding must have consideration. 
The agency by agreement is agency by contract and the 
laws of contracts govern. 

When is writing required? Usually an agency by agree- 
ment may be created orally, that is, without any writing. 

There are however two cases when the agency agreement 
must be in writing. 

(a) When the law requires the principaPs contract to be 
under seal, the agent's authority to make the contract 
must be under seal. 

In Maus vs. Worthing, 3 Scam. 26, an appeal bond under seal 
was held to be invalid because signed by an agent whose authority 
to sign was conferred by letter only and not by an instrument 
under seal. 

Edwards vs. Tyler, 141 111. 454, was a suit for the performance 
of a contract for the sale of real estate. Real estate agents were 
authorized in writing by the owner's wife to make the contract for 
the sale of the property, the wife signing her husband's name to the 
letter and telegram directing the agents to make the sale. Held, 
that in the absence of evidence of authority in writing from the 
husband to the wife the contract was not authorized. 

(b) When the Statute of Frauds requires it, as 

(I) Where the contract is for the sale of real estate 
or any interest in or concerning the same. 

(II) Where the contract of the agent is not to be com- 
pleted within one year from the making thereof. 

2. Agency by ratification. An act done for a party 
without his consent will be deemed his act when he ratifies 



86 AGENCY 

it; that is, when he assents to having the act made his 
own act. 

In Stoehlke vs. Hahn, 158 111. 79, a party had a policy for fire 
insurance. The policy expired and the representative of the com- 
pany called to arrange for a renewal. The policy holder was out in 
the field, and the arrangements for the renewal were made orally with 
his wife at the farm house. The representative assured the wife that 
the insurance would be kept in force until he could see the husband in 
town. In the meantime the property was totally destroyed by fire. 
The husband ratified the wife's agreement to renew the policy and 
it was held that the property was insured by the oral agreement. 

The principal must have full knowledge of all the material 
facts before there is a ratification. If he assents to the 
contract and did not know all the terms there is no ratifi- 
cation. 

Any act that may lawfully be performed may be ratified. 

In Connett vs. City of Chicago , 114 111. 233, Connett and the 
City Attorney of Chicago made an agreement. Connett became dis- 
satisfied and claimed it was void since the City Attorney had no 
authority to make it. The court held the city could ratify the 
agreement regardless of the question whether or not the City 
Attorney had authority to make the agreement in the first instance. 

Methods of ratifying. Ratification may be by : 

(a) Conduct, 

(b) Accepting benefits, 

(c) Silence. 

(a) By conduct. When a party by his conduct has led 
others to believe certain things to be true — when they are 
not — he is bound. 

In Pardridge vs. LaPries, 84 111. 51, the court held that where an 
employee of a store employed an expressman to make its deliveries, 
which he did with the knowledge of the firm, the firm is Uable for 



AGENCY 87 

his pay — if it fails to notify him to collect from the employee, be- 
cause the firm by its conduct led him to believe he was its employee. 

In World's Columbian Exposition vs. Richards, 57 111. App. 601, 
Richards had been engaged by an assistant chief inspector of the 
World's Fair as a ticket seller for six months. Business being dull 
he was discharged before that time. The Fair people claimed their 
inspector had no authority to hire men for six months. The court 
said that it was a fact of world-wide notoriety that the Exposition 
was to continue six months and common business prudence required 
that employees should be engaged for that term. If the assistant 
chief inspector had no such authority, certainly he had, from all the 
circumstances, such an appearance of authority as justified Richards 
in assuming, and acting upon the assumption that he had authority. 
Richards was allowed to recover. 

(b) By accepting benefits. Contracts are not divis- 
ible. An axiom of the law is, '^A man cannot accept 
the benefits without bearing the burdens.'' So, should 
a principal accept the benefits of an unauthorized con- 
tract, the law will presume he meant to bear the burdens. 

The case of Pardridge vs. LaPries (cited on p. 86) illustrates this 
rule. The firm accepted the benefits derived from the expressman's 
contract by its employee, so it was compelled to bear the burden of 
the contract and pay. 

(c) By silence. When a principal knows of acts of his 
agent but does not renounce the acts within a reasonable 
time he cannot later deny the agent's authority. 

Hall vs. Harper y 17 111. 82, was an action to recover a horse 
which the plaintiff's son had exchanged for the defendant's horse. 
A few days before the exchange the plaintiff forbade his son to ex- 
change the horse, but for three months after the exchange the 
plaintiff kept the defendant's horse, without a word of dissatis- 
faction or disapproval. Held, that his silence was a ratification of the 
transaction, the court quoting the legal maxim that '4f one keeps 
silent when duty requires him to speak, he shall not be allowed to 
speak when duty requires him to keep silence." 



88 AGENCY 

3. Operation of law. The cases we have just considered 
are agency by act of the parties. There is one other way 
of creating an agency arid that is by operation of law 
regardless of the intentions of the parties. 

The leading example of an agency by operation of law 
is that agency created by marriage. The wife can contract 
for necessaries and her husband is responsible. But the 
wife cannot bind the husband for articles that are not 
necessaries, unless the husband, by his conduct, has given 
the wife implied authority. 

In Otto vs. Matthie, 70 111. App. 54, the court held the husband 
was not liable for diamond ear rings, a watch, a gentleman's chain, 
and a present to the lover of the cook, which the wife purchased. 

In Bonney vs. PerhaiUf 102 111. App. 634, the court held that since 
Mr. Bonney was giving his wife between sixty and seventy per cent 
of his income every month he was not liable for her expenses out of 
what he held back for himself. 

DELEGATION OF AUTHORITY 

General rule. It is the general rule that when an agent 
has authority to act for another he, only, can act. That is, 
he cannot delegate his authority to another. When you 
employ an agent you choose him because of his reputation, 
ability or personality. You want him and no one else, as 
your agent, when discretion is required. 

Exceptions. There are two cases when the general rule 
does not apply. 

1. When subagents are actually needed. 

In Anderson vs. Alton National Bank, 59 111. App. 587, the court 
held that if a principal appoint an agent to do work which cannot 
be done alone he may appoint another to assist him and that sub- 
agent becomes the agent of the principal. 



II 



AGENCY • 89 

2. When it is customary to appoint them. 

The court in the above case held that the collection was 
sent to another bank in accordance with a well known and 
established usage and custom among bankers in such cases, 
and for that reason a subagent could be legally appointed. 

OBLIGATIONS 

Obligations of agent to principal. The agent is under 
four important obligations to his principal. They are: 

1. Care, 

2. Obedience, 

3. Account, 

4. Loyalty. 

1. Care. When he accepts employment the agent im- 
pliedly agrees to exercise care in his work and he warrants 
that he has the ability to do the work with a reasonable 
degree of ease and skill. However, he does not agree not to 
make mistakes. Where the agent is employed because of 
special skill, he is bound to exercise the skill ordinarily 
possessed by persons in that calling. But a professional 
agent is not required to exercise the highest degree of 
skill. 

In McNevins vs. Lowe, 40 III. 209, the jury was told that if 
the defendant held himself out as a physician he would be liable 
for any damage from want of care or skill on his part whether he 
charged fees or not. On appeal it was held that this was wrong; 
that it states the responsibility of a physician too strongly. It 
required the exercise of the highest degree of care and skill, whereas 
only reasonable care and skill are necessary. 

2. Obedience. The agent is performing an act for the 
principal, and is bound to obey the latter. 



90 ■ AGENCY 

In Spalding vs. Heideman, 96 111. App. 405, the court said that it 
is a fundamental duty of an agent to obey all reasonable and law- 
ful instructions given to him by his principal; and this although 
the agent may think he knows better. 

3. Account. The agent is bound to render an accounting 
of all his acts to his principal. The principal is entitled to 
the profits of the agent whom he employs if those profits 
are made at his expense. 

In the recent case of Perry vs. Engely 296 111. 549, a real estate 
agent was employed to either sell certain city property or to exchange 
it for a farm. He learned that a certain farm could be bought at a 
price much less than the value of the city property, but nevertheless 
proceeded to negotiate an exchange by misrepresenting to the owner 
of the farm that he was acting for himself. He had the deed of the 
farm made to his daughter and then carried out the exchange of 
deeds at a profit to himself. Held, that he was under obligations of 
trust to his employer and should account for the profits he had ob- 
tained at his employer's expense. 

4. Loyalty. The agent's most important duty is loyalty. 
He is bound to further his principaFs interest and pro- 
hibited from furthering his own at the latter's expense or 
loss. 

In Davis vs. Hamlin^ 108 111. 39, a confidential agent secretly 
made a lease for himself, for a theater a short time before the prin- 
cipal's lease expired. The court held that the principal was entitled 
to the advantage of the agent's act. 

Warrick vs. Smith, 137 111. 504, was a suit to reform a deed so as 
to correct a mistake which the agent made when drawing up the 
instrument. The agent acted for both buyer and seller and accepted 
a commission from both parties. Held, that the agent could not 
lawfully act for both parties. The interests of the two contract- 
ing parties were opposite interests and an agent can not be loyal 
to both. 



AGENCY 91 

OBLIGATIONS OF AGENT TO THIRD 
PARTIES 

When he binds hhnself . Although the agent undertakes 
generally to bind the principal and the third parties, yet 
he may bind himself. 

He may bind himself: 

1. When there is no principal, 

2. When he acts without the apparent scope of au- 
thority, 

3. When he expressly binds himself. 

When a party pretends to act as agent but has no 
principal in existence he is liable. It makes no dif- 
ference whether or not he intended any wrong or miscon- 
duct. 

When an agent acts without the apparent scope of 
authority he binds himself. 

An agent may bind himself often when he intends to 
bind his principal. Often confusion arises because of the 
way names are written. 

In Chadsey vs. McCreery, 27 111. 253, a note was made payable 
to ''James G. McCreery, treasurer of the Rock Island and Alton 
Railroad Company." It was held that this was payable to McCreery 
— not the Railroad Company — since the words merely described 
him. 

In Bickford vs. First Nat'l Bank, 42 111. 238, a check was signed 
''R. K. Bickford, agent.'' It was held that Bickford was liable on 
the check as a principal, the word ''agent'' being treated as merely 
description. 

If the agent, Stableton, wants to bind the principal, 
Bower, he should sign ''C. J. Bower by G. K. Stableton, 
agent. ^^ 



92 AGENCY 

OBLIGATION OF PRINCIPAL TO AGENT 

Compensation. The most important obligation of the 
principal to the agent is to pay him compensation for his 
services. It makes no difference whether or not an express 
contract is made. When no amount is specified the usual 
amount paid for such work will be considered reasonable. 

OBLIGATIONS OF PRINCIPAL TO THIRD 
PARTIES 

Liability for agent's contracts. The principal is liable 
to third parties: 

1. For all contracts made by the agent while acting 
within the apparent scope of his authority. 

In Taylor vs. Taylor, 20 111. 650, a United States mail agent made 
arrangements with the owners of a steamboat on the Mississippi 
to handle the mail between New Orleans and Cairo, 111. The owners 
of the boat had a clerk, who, with the knowledge and consent of the 
mail agent, took charge of the mail on the boat and received money 
for the transportation charges. He failed to return money paid him 
on the delivery of certain mail at Cairo and on the next trip was ab- 
sent. The court held the mail agent Hable for the money, as he was 
occupying the position of a principal and the money was paid to the 
clerk while he was acting within the scope of his authority. 

2. And for those acts of the agent which have been 
ratified. 

Hoyt vs. Tuxhury, 70 111. 331, was a suit against the owner 
of certain real estate to compel the performance of a contract 
for the sale of the property. The contract had been drawn up and 
signed in the office of a real estate firm who received the first pay- 
ment of the intended purchaser. The contract was signed by the 
purchaser and by the real estate firm as agents of the owner. It 
turned out that the firm had no authority to sign for the owner, but 
the owner authorized another to make an investigation for him and 



AGENCY 93 

if the contract was to his interest he was to sign for the owner. 
The owner^s agent, after making satisfactory investigation, indorsed 
on the back of the contract that the owner agreed to carry it out as 
stipulated. Held, that the owner was bound by the ratification and 
was compelled to carry out the contract. 

Liability for agent's wrongs. A principal is liable for 
the frauds and other wrongs of his agent. 

In Moir vs. Hopkins, 16 111. 313, the defendants wanted to hire 
a team for use in hauling brick. They sent their agent out to look 
for a team and when he could not obtain one they directed him to 
get a team that belonged to the plaintiff and which the plaintiff had 
been using when working for the defendants. The agent got the 
team without the plaintiff's consent, and while driving down a 
steep hill with a load of brick one of the horses fell and was killed. 
Held, that the defendants, as principals, were liable for the act of the 
agent in getting the horse without the plaintiff's consent, and the 
jury allowed the plaintiff damages for the death of the horse. 

And this is true in some cases even though done without 
his consent if done in the course of his employment. 

Toledo, Wahash & Western Ry, Co, vs. Harmon, 47 111. 298, was 
a suit against the railroad company for damages on account of 
personal injuries received by the plaintiff, caused by the running 
away of his team. The plaintiff was just about to cross the track 
of the defendant when the defendant's engineer let off steam from 
the engine with a loud noise and frightened the plaintiff's horses. 
The court held that whether the act of the engineer was done 
necessarily in the operation of the engine or whether it was per- 
formed wilfully and wantonly the company was liable. 

Liability for negligence. A principal may be liable 
because of negligence. 

In American Hominy Co. vs. Millikin Nafl Bank, 273 Fed. 
Rep. (U. S. District Court) 550, the Hominy Co. conducted a grain 
elevator. Its agent was authorized to buy grain and pay for it by 
drafts drawn on the Company. The agent forged 129 drafts, which 



94 AGENCY 

were paid by the Bank. After the Hominy Co. paid the Bank the 
fraud was discovered and the Company sued to recover the amount 
paid. 

Federal Judge Fitz Henry in giving his opinion stated the general 
rule to be that, ^' where one of two persons must suffer loss, he who 
by his negligent conduct made it possible for the loss to occur must 
bear it." The Hominy Co. by not checking up its agent's transac- 
tions allowed the fraud to continue undiscovered and so it was com- 
pelled to bear the loss. The Bank was not liable. 

OBLIGATION OF THIRD PARTIES TO AGENT 

In only a few cases can an agent sue third parties on a 
contract. But he can sue for wrongs done if he has suffered 
damages. 

OBLIGATION OF THIRD PARTIES TO PRIN- 
CIPALS 

In contract. The principal can enforce contracts made 
by his agent. He can sue sometimes even when the agent 
signed his own name instead of the principalis and the 
third party did not know of the principal. 

In Saladin vs. Mitchell, 45 111. 79, a defendant contracted to buy 
a quantity of barley which was on board a brig at Chicago. The 
contract was made with a grain broker who signed the note of sale 
in his own name, and the name of the principal was not disclosed 
but the defendant knew he was dealing with a broker. It was held 
that either the broker or the owner of the grain could sue the de- 
fendant for his failure to accept and pay for the grain. 

For wrongs. The principal may recover from the third 
parties when they have worked with the agent to defraud 
him. An illustration of this is the case of third parties 
getting the agent to break his principal's contract or 
injure his business. 



AGENCY 95 

In Dor emus vs. Hennessy, 176 111. 608, the plaintiff was engaged 
in the business of soliciting and managing laundry work. She did 
not do laundering herself but she had contracts with laundries to do 
the work for her. The defendants, who operated other laundries, by 
means of unfair competition induced the plaintiff's agents to quit 
doing her laundry work, and in an action by the plaintiff it was held 
that a combination by the defendants to induce the plaintiff's agents 
not to deal with her or do any further work for her was an actionable 
wrong. 

TERMINATION OF AGENCY 

When may agency be terminated? An agency may be 
terminated at any time by either principal or agent. But 
when there is an agency coupled with an interest, the agent 
may recover any damages he has suffered. An agency 
coupled with an interest exists when an agent has paid for 
the agency, or has some pecuniary interest in the subject 
matter of the agency. 

Ways. Agency may be terminated by: 

1. Act of the parties, 

2. Operation of law. 

Act of the parties. Termination by act of the parties 
may be by : 

1. Mutual consent, 

2. Principal, 

3. Agent. 

1. After studying contracts it should be known that 
parties may mutually agree to abandon a contract. 

2. Termination by the principal is known as revo- 
cation. 

Since this is a fiduciary relation the utmost freedom is 
allowed in terminating the agency, although as explained 
in the case of an agency coupled with an interest the 



96 AGENCY 

principal may be liable for damages for revoking an 
agent's authority. 

3. Termination by the agent is known as renunciation. 

The agent may renounce at any time but he also may be 
liable for damages in not carrying out his contract. 

Termination by operation of law. The agency contract 
may be terminated by operation of law whenever the con- 
tinuance of the relation would be a disadvantage to the 
parties or the maintenance of the relation would be im- 
practicable. 

Agency may be terminated by operation of law in case of : 

1. Death, 

2. Insanity, 

3. War, 

4. Destruction of subject matter. 

1. The death of either the principal or agent ends the 
agency, whether the surviving party knows of the death of 
the other party or not. 

In Estate of Rapp vs. Phoenix Insurance Co., 113 111. 390, it was 
held that the death of the principal is of itself a revocation of the 
agent's authority, and that all contracts subsequently entered into 
by the agent are void, notwithstanding the death of the principal 
was not known at the time the contracts were entered into. 

2. It is clear that an insane party is not, as a matter of 
fact, competent to act as either principal or agent, and the 
courts usually hold that this will discharge the parties. 

In Sands vs. Potter, 165 111. 397, Sands engaged Potter's services 
in his business of buying and selhng butter and cheese. After the 
contract was drawn and while it was in force Sands was adjudged 
insane, but was afterwards declared to be restored to his reason. It 
was held that the insanity did not destroy the contract. A distinc- 



AGENCY 97 

tion was made between a contract of hiring between master and 
servant and a contract of agency. This is an important distinction 
and often arises in questions of agency. In brief, it may be said that 
a servant merely follows instructions while an agent may exercise 
his own judgment in many matters. If Jones orders Smith to put the 
horse in the barn, Smith is a servant. If he orders Smith to sell the 
horse. Smith is an agent. 

3. During a state of war all commercial relations be- 
tween citizens of warring nations are suspended — if not 
actually broken off — since each citizen of the one country 
is an enemy of each citizen of the other country. 

4. Where the subject matter of the agency is destroyed 
the agency is terminated. It would be idle to maintain an 
agency with nothing for either the principal or agent to do. 



QUESTIONS ON AGENCY 

1. Define agency. 

2. Who may be a principal? An agent? 

3. What is meant by ^^ within the apparent scope of authority"? 

4. Reynolds, a shoe clerk, sells a chair in the store to a customer 

without the owner's express consent. Is the owner bound? 

5. In what three ways may agency be created? 

6. In what cases is a writing required to have an agency contract 

binding? 

7. Wade, without an authority from Becker and without his knowl- 

edge, bought a stock of goods in Becker's name. It was 
a bargain and Becker decided to take advantage of it. How 
can he make the contract his own? 

8. Name the three ways in which a principal may ratify another's 

act. 

9. The wife of a man who earns only $75 a month and has no in- 

come except that amount bought, in one month, $20 worth of 
' groceries, $10 worth of clothes that their children needed, 
and a talking machine that cost $60. Is her husband bound 
to pay for all these things because of an agency created by 
operation of law? Why? 



98 AGENCY 

10. Knight was appointed by Hinton to act as his agent in consult- 

ing with the President of the Pennsylvania Railroad in an 
effort to secure contracts involving several hundred thousand 
dollars. Could Knight delegate his authority to another? 
Why? 

11. Fanning, an agent of Dobson, was told to sell a warehouse 

of cotton if the price ever reached $15,000. It reached 
that figure but Fanning did not sell because it looked as 
if it would reach $25,000 or even $30,000. Instead it dropped 
to $7,000. Was Fanning hable to Dobson for the $8,000? 
Would he have been required to pay all the $30,000 if it had 
gone that high? 

12. David was employed by Gavins in buying land. Gavins told 

him to buy certain property for $240 an acre and to sell it if 
he could get $260 an acre. David got $280 for it and gave 
Gavins $270. Gavins was very well pleased but did not 
know that David had kept $10 an acre. Gould Gavins later 
recover the $10 an acre? Give reason. 

13. Why isn't an agent allowed to represent both parties in a 

sale without the consent of each? 

14. In what three ways may an agent be bound on a contract? 

15. What is the most important obligation of the principal to the 

agent? 

16. On what contracts of the agent is the principal liable? 

17. What did the Supreme Gourt hold in the case of Moir vs, 

Hopkins? 

18. In what way does the above case differ from Toledo, Wabash 

& Western Ry. Co. vs. Harmon? 

19. When can an agent sue a third party? 

20. Thomas owned a manufacturing plant employing several 

thousand men. Henderson, a rival, who had a grudge against 
him succeeded in getting the men to quit and the plant went 
into bankruptcy. Gould Thomas recover damages from Hen- 
derson? What case in the text answers this question? 

21. What is the rule as to when an agency may be terminated? 

22. In what two ways may an agency be terminated? 

23. Name the three ways of terminating an agency by act of the 

parties. 

24. Name the four ways in which it may be terminated by operation 

of law. 

25. What is the difference between an agent and a servant? 



AGENCY 99 

20. Anderson is hired by Baldwin to shine his shoes. Is he an 
agent or a servant? Why? 

27. Suppose in the above case he is hired to buy up property to 

put shoe shining parlors in. Is Anderson an agent? Why? 

28. Wood employs Jacobs to sell his house. The house burns 

before a sale is made. What effect has this on the agency? 

29. If another house is built in its place, what effect has it on the 

agency? 

30. Orville Neece was buying land for Parker. On November 3rd 

he bought some land for Parker but later learned that his 
principal had died on November 2nd. Would the estate of 
Parker be bound for the sale? 



CHAPTER V 

SALES OF PERSONAL PROPERTY 

Difference between personal and real property. Personal 
property has been defined as an3rthing of a movable nature 
and real property as anything of a fixed, permanent and 
substantial nature. Not everything movable is personal 
property but things of a movable nature are. A house is 
movable but not of a movable nature. It is of a fixed na- 
ture and is real property. A houseboat on a river is personal 
property. Growing trees are real property but when cut 
they are personal property. 

Johnson vs. Barber ^ 5 Gilm. (10 IlL), 425 was an action for 
damages for setting fire to a prairie. The fire destroyed the plaintiff's 
hay stacks and it was held that he did not have to prove title to the 
land where the stacks were in order to be entitled to damages for 
their destruction. The hay was held to be personal property after 
it was cut and the plaintiff was required only to prove his title to the 
hay regardless of where it was cut or where it was when it was de- 
stroyed. 

DIFFERENCE BETWEEN GIFT, SALE, BARTER, 
MORTGAGE AND BAILMENT 

1. A gift is the transfer of title to property without 
consideration. 

2. A sale is the transfer of title to property for a money 
consideration. 

3. A barter is the transfer of title to property with other 
property as a consideration. 

100 



SALES OF PERSONAL PROPERTY 101 

4. A mortgage is the transfer of title to property, the 
title to be defeated under certain conditions. 

5. A bailment is the transfer of property upon considera- 
tion without the title being transferred. 

The last four differ from gift in that there is considera- 
tion. Bailment differs from the first four in that the title 
does not pass, only the goods pass. (See chapter on Bail- 
ments.) The first three differ from mortgage in that title 
passes absolutely in the first three instances but may be 
defeated in the last one. Gifts have been referred to in the 
chapter on contracts (see p. 57). 

Gambling contracts are void. Gambling contracts are 
void, so there cannot be a sale of chattels where the real 
intention was to gamble. 

In Jamieson vs, Wallace, 167 111. 388, a widow invested nearly 
all she was worth in trading on the stock exchange. To cover her 
losses her brokers took from her certain valuable securities and when 
she could not pay the losses sustained in the market's decline the 
brokers informed her they would have to sell the securities to meet 
the losses and to obtain their commissions. By a suit in equity for 
an accounting she was allowed to recover the securities on the ground 
that her investments were void as gambling contracts. It was held 
that it could not be presumed that dehvery of the stocks purchased 
by her was intended by the parties when she did not even have 
enough money to cover the fluctuations in the market. 

In Pope vs. Hanke, 155 111. 617, the court held as to contracts to 
buy or sell on the Board of Trade, that if the parties intended to 
gamble the contracts would be void. But if they intended an honest 
transaction they would be valid. And it is the duty of jury to deter- 
mine what they intended. 

Statute of Frauds. Attention is once more called to the 
fact that the 17th Section of the Statute of Frauds applies 
to the sale of personal property of the value of $500 or 
more (see p. 67) and that sales that fail to comply with its 
terms are not valid. 



102 SALES OF PERSONAL PROPERTY 

FIXTURES 

Defined. A fixture is an article of personal property 
annexed to real property. 

The fixture is personalty before it is annexed but realty 
when annexed. Some fixtures can be removed. When 
the fixture is removed it is no longer realty but per- 
sonalty. 

Kinds of annexation. The fixtures may be annexed by : 

L Actual annexation, 

2. Constructive annexation. 

By actual annexation is meant a real (genuine) attach- 
ment, as where a cornerstone is actually annexed to the 
foundation by cement. 

Constructive annexation is not real but a fictitious 
attachment ^4n the eyes of the law ^^ only. A key in a door 
is an example. 

Smith vs. Price, 39 111. 28, illustrates actual annexation. The 
complainant had purchased a tract of land from the defendant 
and afterward the defendant sought to enter upon the land and 
remove certain fruit-trees and ornamental shrubbery grown thereon 
for nursery purposes. Held, that as between buyer and seller 
such trees were a part of the real estate and pass to the purchaser 
of the premises. 

McLaughlin vs. Johnson, 46 111. 163, illustrates constructive 
annexation. The plaintiff's wife, while he was away in the army 
during the Civil War, allowed the defendant to borrow some rails 
from a rail fence on a tract of land belonging to the plaintiff. The 
defendant afterward purchased the land from the plaintiff, after 
which the plaintiff brought suit for the rails which were still in the 
possession of the defendant. Held, that the rails, although actually 
removed from the land, were nevertheless in the eyes of the law a 
part of the realty and passed to the defendant when he purchased 
the land. 



SALES OF PERSONAL PROPERTY 103 

In Clark vs. Burnside, 15 111. 62, some of the rails at the time 
they were removed were a part of a fence and others were in stacks. 
In an action by the heirs of the estate or land from which the rails 
were removed it was held that rails taken from a fence could be 
included as real property claim, but that the rails which were in 
stacks at the time they were taken were personal property. 

Removal of fixtures. The question of whether the fix- 
tures can be removed or not arises often. The parties 
usually involved are : 

1. Landlord and tenant, 

2. Mortgagor and mortgagee (one who gives the mort- 
gage and one who takes it), 

3. Vendor and vendee (seller and buyer). 

In disputes between these parties as to removal of 
fixtures the presumption is against the landlord, the mort- 
gagor and the vendor. The courts favor the tenants because 
of the fact that generally tenants put in fixtures for their 
own benefit and not for the benefit of others. Unless the 
contrary is shown the courts will believe the landlord 
understood that to be the contract. To allow tenants to 
remove trade fixtures encourages business. 

In Kelly vs. Austin, 46 111. 156, the court said, ''The law has al- 
ways been liberal in the promotion of trade, by allowing the lessee 
to remove trade fixtures." 

The presumption is against landlords and sellers remov- 
ing fixtures because they put the fixtures on the property 
while they own it, and usually owners who improve their 
property do not expect to damage it by their removal. 
So unless a contrary intention is shown the courts will 
compel the seller to leave the improvements. 

In Smith vs. Moore, 26 111. 392, it was held that as between 
mortgagor and mortgagee, the mortgagor has no right to remove 
fixtures placed by him upon the land after the mortgage is given. 



104 SALES OF PERSONAL PROPERTY 

TESTS USED TO DETERMINE WHETHER OR 
NOT FIXTURES MAY BE REMOVED 

Our Supreme Court (in Sword vs. Low, 122 111. 487) has 
held that there are three tests used to determine whether 
or not fixtures remain with the property and pass with the 
other real property or whether they may be removed and 
become personal property again. 

These tests are : 

1 . The intention of the parties, 

2. Actual annexation, 

3. Use or purpose of thing to which the fixture is annexed . 

1. Intention of the parties. The intention of the parties 
is the most important test to discover whether or not fix- 
tures are to be removed. What did the parties intend 
when the fixture was put there? 

The relation of the parties is one factor of importance in 
determining their supposed intention, for example: subject 
to the right of the landlord to hold for rent, the tenant may 
remove all removable fixtures erected by him during his 
lease. 

But in Bedford vs. Bedford, 136 111. 354, where minor children 
inherited land from their mother, and their father continued to 
cultivate the land after the mother's death, it was held that, although 
the relation of landlord and tenant might be regarded as existing 
between the children and their father, improvements made by the 
father by fencing the land became a part of the realty and were 
not removable. The children, however, were not required to pay 
for the improvements. 

2. Actual annexation. 

Ogden vs. Stocky 34 111. 522, was an action to recover a house 
which had been removed from a lot on which it was erected. The 
court held that the intention, no matter how clearly expressed, 



SALES OF PERSONAL PROPERTY 105 

was of no avail if the party had no right to erect the house on the 
lot. The actual annexation determined that the fixture was not 
removable. 

3. Use or purpose of thing to which fixttire is annexed. 

The use or purpose of the thing to which the fixture is 
annexed is important. In this connection it may be said 
that the mere fact that a fixture is difficult to remove does 
not necessarily determine whether it is removable. 

In Baker vs. McClurgy 198 111. 28, it was held that where a 
building was erected and leased as a bakery, ovens and other trade 
fixtures built in the openings for that purpose may be removed by 
the lessee if they are removable without material injury to the 
building even though the brick-work or masonry of the ovens must 
be demolished and the machinery taken apart in order to remove 
them. 

When may they be removed? The fixtures must be re- 
moved while the party is in possession of the property. If 
he waits until afterward he cannot legally remove them. 

Leman vs. Best, 30 111. App. 323, was an action to recover the fix- 
tures in the Sherman House in Chicago used in connection with the 
cigar stands. The court held that since Best did not remove them 
when he was a tenant he never could remove them. 

Even if the tenant gets possession later he cannot then 
remove the fixtures. 

Caveat emptor. Caveat emptor (ka-ve-at emp -tor) 
translated reads^ '^Let the buyer beware,'^ and is one of 
the settled principles of our law in the sale of personal 
property where the buyer has an opportunity of inspecting 
the goods. If the buyer has a chance to inspect the goods 
but fails to do so or examines them and makes a mistake as 
to their value or quality he cannot get any relief from the 
courts. 



106 SALES OF PERSONAL PROPERTY 

Cogel vs. Kniseley, 89 111. 598, was an action to recover the price 
agreed to be paid for a steam engine. The defendants after the 
purchase discovered cracks in the engine bed and refused to pay 
for the engine. They understood they were not buying a new 
engine but alleged that it was fraud on the part of the plaintiff not 
to tell them about the cracks and to fail to disclose the fact that the 
engine had been through the Chicago fire of 1871. Held, that the 
failure to make such disclosures did not constitute fraud and that as 
the defendants had opportunity .to examine the engine they pur- 
chased at their peril. 

In Kohl vs, Lindley, 39 111. 195, the defendants purchased a quan- 
tity of hay for the purpose of feeding sheep and after taking a portion 
of the hay they refused to take the rest on the ground that the hay 
was unsound and unfit for baling, and was not fit to be fed to horses. 
The defendants tendered money for what they took but refused to 
accept or pay for the rest. Held, that there was no fraud on the 
part of the plaintiff in failing to disclose the defects of the hay where 
the defendants had opportunity to examine it. They were bound 
to take the entire lot if it was fit for the use for which it was bought. 

But there are exceptions to this rule when the pubhc 
good is involved. 

In Wiedeman vs. Keller j 171 111. 93, the plaintiff purchased 
a quantity of pork to be used in her family. The pork turned out to 
be unwholesome and unfit for use; those who ate of it became ill, 
and the plaintiff sued for damages. Held, that when *' articles of 
food are purchased from a retail dealer for immediate consumption, 
the consequences resulting from the purchase of an unsound article 
may be so serious and may prove so disastrous to the health and life 
of the consumer that public safety demands that there should be 
an implied warranty on the part of the vendor that the article sold 
is sound and fit for the use for which it was purchased." 

CONDITIONS (See CONDITIONAL SALES, p. 112) 

Effect of breach. A condition (as here used) is an act 
that must be performed or a state of affairs that must 
exist, before title passes. 



SALES OF PERSONAL PROPERTY 107 

The breaking of a condition (known hereafter as a breach 
of condition) makes the contract voidable at the option of 
the innocent party. 

In Tascott vs. Rosenthal, 10 111. App. 639, goods were purchased 
upon the express condition that they were to be shipped at a 
certain time. They were shipped sooner and were lost. It was held 
that the buyer was reheved as the seller broke the contract. 

The mere fact that a stipulation is called a condition does 
not mean it is not a warranty and it may be a condition 
although called a warranty. 

WARRANTIES 

Effect of breach. A warranty is a statement by one of 
the parties by which he renders himself liable if things are 
not as he has represented. 

If there is a breach of warranty the innocent party may 
recover damages but the contract is not broken. 

Warranties are either express or implied. 

Express warranties. An express warranty is a warranty 
whose terms are expressed by the parties. 

An implied warranty is a warranty whose terms are 
implied by law. 

If there is an express warranty there can be no implied 
warranty. 

No set form must be used in order to create a warranty. 
Any positive representation is sufficient. 

In Kenner vs. Harding j 85 111. 264, the plaintiff purchased a mule 
which proved to be unsound. The defect was plainly visible upon 
examination but the plaintiff, on being told the mule was known to 
kick, did not go into the stall to examine the animal closely. He 
relied upon the defendant's statement that the mule was sound and 
was allowed to recover damages. 



108 SALES OF PERSONAL PROPERTY 

In Robinson vs, Harvey, 82 111. 58, the defendants sought to avoid 
the payment of their promissory note on the ground that it was given 
for the purchase of one horse and sixteen mules which the plaintiff 
had warranted as sound and which proved to be unsoimd. The 
defendants were in the business of buying mules for the Southern 
market and called upon the plaintiff on a rainy day when the animals 
were in the barn lot almost up to their knees in mud. In view of the 
fact that they could not well examine the animals on such a day the 
defendants alleged that they reUed on the plaintiff's statements that 
the animals were sound, that the mules were broke and none were 
less than three years old. Held, that no particular form of words is 
necessary to create a warranty and that the alleged statements of 
plaintiff, if proved, would be sufficient for a warranty. 

Implied warranties. There is an implied warranty that 
the goods belong to the seller when he has them in his 
possession. 

In Linton vs. Porter, 31 111. 107, a widow sold a certain pile driver 
which was in the possession of her husband at the time of his death. 
The purchaser gave his promissory note to pay for the article and 
when sued on the note, he set up the defense that the widow did not 
own the pile driver and consequently there was no consideration for 
his note. Held, that as long as the purchaser kept the pile driver he 
could not set up the defense of want of consideration, but if, at any 
time he should be deprived of his possession of the article because he 
acquired no title to it by virtue of his purchase he would be entitled 
to recover the value of the property from the widow on the implied 
warranty that the property was hers while it was in her possession. 
(This is a good case to illustrate the relative values of *' possession,'' 
*' title,'' ^ implied warranty," and '^ consideration.") 

Where goods are sold by description there is an impHed 
warranty that the goods shall be as described. 

Wolf vs. Deitzsch, 75 111. 205, was an action for the price of wine 
which a party in Chicago ordered from a New York house. The 
defense was that the wine was not of the quahty ordered and it 
was held that the burden was on the plaintiff to prove that he 
compHed with the order by delivering to the carrier the kind of wine 



SALES OF PERSONAL PROPERTY 109 

ordered. This the plaintiff proved to the satisfaction of the court, 
while, on the otlier hand, it was proved that the defendant, after 
receiving the wine, allowed it to be stored in a cellar which was 
adjacent to a kitchen to which the door was open a good part of the 
time, allowing warm air to get into the wine room. The defendant, 
during his absence from the shop, allowed his employees to open the 
cask and sell several gallons of the wine and his customers began to 
make complaints that it was sour. Held, that the defendant, by 
his acts of ownership of the wine after it was received by him, 
caused the property to vest in him and that its subsequent deteriora- 
tion was his loss. 

When a manufacturer sells goods he impliedly warrants 
that there are no hidden defects which would render them 
unfit for their usual purpose. This is reasonable since it 
may well be supposed that he is familiar with the processes 
used and is a competent manufacturer. 

Beers vs. Williams y 16 111. 69, was a suit on a promissory note given 
to pay for a steam boiler which was purchased of the plaintiff. The 
defense was that the boiler was defective, that after a fair trial with 
proper usage it exploded. Held, that ^Hhe manufacturer who sells 
a steam boiler impliedly warrants that it is made of sound material 
and good workmanship. The warranty may not extend to any par- 
ticular thickness of iron, for that is visible on inspection, nor that it 
will sustain any given pressure; but every consideration of public 
policy and private justice demands the rule, that the manufacturer 
shall be answerable for the quality of the material used and for the 
integrity of the workmanship.' ' 

When a person buys groceries from a grocer or meat from 
a butcher there is an implied warranty that they are 
wholesome. (See Wiedeman vs. Keller, 171 111. 93, cited 
on p. 106.) 

TITLE 

Title of seller. It is the general rule that a seller cannot 
give better title than he, himself, has. The buyer takes 
only the title the seller had, whatever that may have been. 



no SALES OF PERSONAL PROPERTY 

In Klein vs. Seibold, 89 111. 540, a husband sold personal property 
belonging to his wife. The wife had no notice of the sale and had 
given her husband no right or title to the property. Held, that the 
purchaser acquired no title although he had no notice that the 
property did not belong to the husband. ''A mere naked possession 
in a seller will not hold good against the true owner, and he may pur- 
sue his property and recover it from a purchaser, without notice. As 
a protection to such purchasers, the common law implies a warranty 
of title by a seller of chattels, and the purchaser has his remedy 
against his seller in case his title fails.'' 

In Fawcett vs. Oshorn, 32 111. 411, the plaintiff delivered some 
hides to be made into leather. One of the tanners shipped part of 
them to Chicago where they were sold in open market for a fair 
price. Held, the purchaser got no title, as the seller had no title. 

Title of finder. Usually the finder of personal property- 
acquires no title. The owner has not parted with title by 
losing the goods. 

In Illinois the finder of goods is bound by law to ad- 
vertise them if worth less than $15. If not called for within 
a year they belong to the finder. If worth over $15 they 
shall be given to the County Treasurer. If the owner is 
not found the goods belong to the County. 

Title of thief, A thief acquires no title, so he cannot pass 
a title, no matter whether or not the purchaser knew it was 
stolen. 

Sharp vs. Parks , 48 111. 511, was a suit to recover the value 
of a certain quantity of wool which was stolen from the plaintiff. 
The thief sold the wool to the defendant and the defendant sold 
it to another party. The wool was sold to the defendant in fleeces but 
was packed by him and could not then be identified by the plaintiff. 
Held, that the defendant was liable for the value of the wool. 

An exception to the rule that a thief can pass no title 
exists in the case of negotiable instruments. If the pur- 
chaser buys the negotiable paper from the thief in good 



SALES OF PERSONAL PROPERTY 111 

faith and for fair value he gets good title even against the 
real owner. 

A thief steals a diamond and a promissory note (a 
negotiable instrument) and sells them for a fair price to 
Lawrence who did not know they were stolen. Later the 
owner proved they were his. The owner could recover 
the diamond since ^^ a thief can pass no title, '' but the note 
being an exception he could pass title and the owner could 
not recover. 

In Jones vs, Nellis, 41 111. 482, the defendant was sued for the 
value of a government bond which he had purchased from a thief. 
Held, that although the general rule is that the purchaser of property 
from a thief acquires no title, there is an exception in the case of 
money or negotiable paper or bonds which are negotiable by mere 
delivery, and the plaintiff from whom the bond was stolen was not 
allowed to recover. 

Title by agent. An agent authorized to sell may pass 
title, since the act of the agent is the act of the principal. 
His sales will be binding when he acts within the apparent 
scope of his authority even though contrary to his in- 
structions, if the other party is ignorant of these instruc- 
tions. 



When does title pass? 

In Schneider vs. Westerman, 25 HI. 514, the court said, "The 
title to personal property cannot vest in the purchaser until the 
purchase is completed, and nothing remains to be performed under 
the agreement.'' 



Intention. However, if the parties intend the title to 
pass before everything is done, it will pass. The object of 
the courts is to discover the intention. 



112 SALES OF PERSONAL PROPERTY 

In Shelton vs, Franklin^ 68 111. 333, the plaintiff purchased a 
number of hogs from the defendant's partner. The defendant 
claimed the partner had no right to sell the hogs and on the day 
of purchase, after the plaintiff had paid for the hogs, had collected 
them together and was driving them away, the defendant appeared 
on horseback, accompanied by dogs, and so scattered the hogs that 
they could not be recovered by the plaintiff. The plaintiff, in a suit 
in court, was allowed to recover possession of the hogs on the 
ground that the title had passed even though the hogs were to be 
weighed after the transaction in order to determine how much of the 
purchase price was to be credited for the plaintiff on other accounts 
with the partners. 

In the language of the opinion: '^Although something remains 
to be done for the purpose of vesting the property, or to fix the 
amount to be paid, by weighing, measuring, or the like, the property 
will pass before the act is done, if such appears by the contract to 
have been the intention of the parties." 

Separation of goods. Before goods to be sold have been 
separated from the rest there is no sale. If a party agrees 
to buy three paintings at an exhibit but fails to designate 
what three, there is no sale unless the parties expressly 
agree to the contrary. 

But an exception exists in the case of corn, oats, or wheat 
that is to be sold, which is part of a larger quantity stored. 
They need not be separated. 

CONDITIONAL SALES 

Installment sales. By ^'installment sales'' is meant 
sales made upon condition that partial payments be made 
at stated times. Pianos, automobiles and furniture are 
common subjects of such sales. The title then passes when 
the payments are completed. 

It is often provided that the seller may reclaim the 
property when the buyer fails to pay an installment and 
this is valid between the parties. 



SALES OF PERSONAL PROPERTY 113 

However, third parties ignorant of these conditions must 
be protected and it may be void as to them. 

In McCormick vs. Hadden, 37 111. 370, two horses were sold and 
delivered to the purchaser, but there was an agreement between 
the parties that the title should remain with the seller until the 
purchaser should give a chattel mortgage. Creditors of the pur- 
chaser, who gave him credit in a transaction while he was in posses- 
sion of the horses, were allowed to recover the animals after they had 
been returned to the seller. 

The parties may not term the sale as conditional al- 
though the law may treat it as a conditional sale. 

In Miirch vs. Wright, 46 111. 487, it was held that a contract for 
the sale of a piano by monthly installments of rent is a conditional 
sale even though called a lease by the parties to the agreement. 

Sales upon approval. Merchants selUng goods and giv- 
ing the purchaser the option of returning them later if not 
satisfactory are not making an absolute sale but a con- 
ditional sale. 

It will become absolute if the buyer does not exercise 
this option: 

1 . Within the time limit agreed upon, 

2. Within a reasonable time, 

3. On demand. 

Jones vs. Wright, 71 111. 61, was a suit for the price of printer's 
ink which had been delivered to the defendant. The defendant pur- 
chased the ink for the purpose of selling it at retail and was given 
the option of returning any amount remaining unsold by him. When 
he became financially embarrassed the plaintiffs demanded a return 
of the ink, which the defendant refused. It was held that the refusal 
to return the ink on demand rendered the sale absolute and the 
defendant was liable for the price. 



114 SALES OF PERSONAL PROPERTY 

DIFFERENCE BETWEEN CONDITIONAL SALES 
AND MORTGAGES 

In a conditional sale the title does not pass until the 
condition has been fulfilled. In a mortgage the title passes 
at once but may be defeated upon the happening of some 
event. 

A mortgage is the transfer of property to secure the pay- 
ment of a debt. When the payment is made the property 
is transferred to the original owner. In a mortgage title 
passes, subject to defeat. In a conditional sale the title 
does not pass until the condition is complied with. 

A chattel mortgage is a mortgage on personal property. 
A real estate mortgage is one on real property. 

REMEDIES OF THE SELLER FOR BREACH OF 
CONTRACT 

Explanation. In case either party breaks his contract or 
does not fulfill its terms, there is a breach. 

When the buyer fails to pay for the goods he has bought, 
the seller may sue for the price, or if the purchaser refuses 
to accept the goods the seller may sue for damages. 

Stoppage in transit. The seller has the right to stop 
the goods while they are in transit if the buyer is in- 
solvent.. 

A party is insolvent when he cannot pay his debts 
when they are due. He may be insolvent without hav- 
ing been declared by the courts to be either insolvent or 
bankrupt. 

For refusal to fulfill. When one of the parties says he 
will not fulfill his part of the contract, the other party 
may assume the contract broken immediately, without 
waiting to see if he will fulfill it. 



SALES OF PERSONAL PROPERTY 115 

Follanshee vs, Adams, 86 111. 13, illustrates such a transaction 
on the Chicago Board of Trade. The parties were members of the 
Board and the purchaser contracted for the purchase of 60,000 
bushels of wheat to be delivered and paid for the following month. 
Three days later the party who had contracted to sell became in- 
solvent and notified the purchaser that he would be unable to deliver 
the wheat. The purchaser took him at his word, went to a broker at 
the exchange and learned the price of wheat on that day and charged 
the difference between that price and the contract price to the 
account of the seller. The seller subsequently offered to perform his 
part of the contract and sued the purchaser for his refusal to accept 
and pay for the wheat. Held, that the contract was rescinded by the 
declaration of the seller of his inability to perform and the action of 
the purchaser in settling upon the difference between the market and 
the contract price on the day of said declaration. 

Amount of damages. The amount of damages is the 
loss that directly resulted from the breach plus in- 
terest. 

In Murray vs. Doud, 167 111. 368, a purchaser broke his contract 
to buy a quantity of leaf lard at a certain price and it was held that 
the measure of damages was the difference between the contract 
price and the market price of the lard at the time of the breach. 



REMEDIES OF THE PURCHASER FOR BREACH 
OF CONTRACT 

For failure to deliver. When the seller fails to deliver 
the goods, the purchaser may sue for damages, but he 
cannot sue for the goods themselves. 

In Haverstick vs. Fergus, 71 111. 105, the plaintiff contracted for 
the purchase of a boiler and the defendant refused to carry out the 
contract and dehver the boiler. It was held that the plaintiff's 
remedy was an action for damages for the breach of the contract and 
that he could not recover the property itself by an action for the 
reason that the title never vested in him. 



116 SALES OF PERSONAL PROPERTY 

Specific performance has already been referred to (see p. 
69) and instances given in which it will and will not be 
enforced. 

QUESTIONS ON SALES OF PERSONAL PROPERTY 

1. What is the difference between real and personal property? 

2. Which of the following are personal property? (1) a railroad 

track, (2) a sidewalk, (3) a piece of statuary weighing 
seven tons located in a yard, (4) a set of books, (5) an electric 
desk fan. 

3. In what way does a gift differ from sale, barter, mortgage and 

bailment? 

4. In what way does mortgage differ from the remaining four? 

5. In what way does bailment differ from the remaining four? 

6. What is the test used to determine whether contracts for the 

sale of stocks or produce on the Board of Trade are valid or 
void? 

7. Define a fixture. 

8. Explain actual and constructive annexation. 

9. What parties are most often involved when the question of the 

removal of fixtures arises? 

10. Which parties does the law favor? Why? 

11. What three tests are used by our courts to determine whether 

or not fixtures are removable? 

12. Which test is the most important? 

13. Allen leased a farm from King for a year and erected a wind- 

mill on it. He waited a year and then rented the farm for 
the second time. At the end of the second term he attempted 
to remove the windmill. Will the law permit this? 

14. Temple ton bought a suit of clothes which the clerk said was 

all wool. Eeaching home he learned it was mostly cotton. 
If the clothier refused to refund the money could Templeton 
recover in a law suit? 

15. Would it have made any difference if Templeton had purchased 

food instead and it had made members of his family sick? 

16. What is the effect of a breach of a condition? 

17. What is the effect of a breach of a warranty? 

18. Why didn't the rule ^'caveat emptor'' apply in the case of 

Kenner vs. Harding? 



SALES OF PERSONAL PROPERTY 117 

19. Name four implied warranties. 

20. Lawrence found a watch worth $30. He advertised it for 

a year but no one claimed it. Then he sold it to Evans. 
Who has the legal title to it? 

21. Suppose the watch was worth $12. Who has the legal title? 

22. Suppose Lawrence stole it. Who has the legal title? 

23. Suppose LawTence had stolen negotiable paper instead of the 

watch. Who would have the legal title? 

24. In general, when does the title to property pass? 

25. If the parties intend to have the title pass, will it pass before 

everything is done? 

26. What is an installment sale? 

27. When does the title pass in such sales if no intention is ex- 

pressed? 

28. Barton bought a kitchen stove on approval. The hardware 

dealer told him to take it home to see whether it was satis- 
factory. Barton kept it from February until May and 
returned it, saying it wasn't just what he wanted. Who 
owns the stove? 

29. What is the difference between a conditional sale and a mort- 

gage as far as title is concerned? 

30. What is the difference between a chattel and a real estate 

mortgage? 

31. What is meant by a breach of a contract? 

32. W^hen can a seller exercise the right of stoppage in transit? 

33. Chapman made a contract with Bishop whereby he was to sell 

his automobile the following month for $2,500. The price 
of cars advanced and he said he would not deliver the car 
the next month. Can Bishop treat the contract as broken 
without waiting to see what Chapman will do? 

34. What two remedies are there if a seller refuses to deliver goods? 



CHAPTER VI 

BAILMENTS 

Defined and explained. A bailment is the delivery of 
personal property to a party to be returned, either in the 
same or different form. 

Milk sent to the creamery to be redelivered as butter, 
logs sent to a mill to be returned as railroad ties, jewelry 
given to a jeweller to be repaired, and books borrowed 
are examples. But when grain is stored the identical grain 
does not have to be returned if grain of like quality is 
returned. 

In Mayer vs. Springer, 95 111. App. 173, Mayer stored wheat in 
the mill of Springer in 1898, taking a receipt showing that it was 
held in storage for him. He knew his wheat was mixed with other 
wheat. In 1899 the mill and its contents burned. The court held 
that if Springer kept on hand the wheat or its equivalent in kind 
and quantity ready to be returned to Mayer on demand, the deposit 
was a bailment and not a sale. 

A bailment is based upon a contract, either express or 
implied. If the duty results from the agreement of the 
parties it is an express contract. If it results from a rule 
of law it is an implied contract. 

A man leaves walnut logs with a cabinet maker who is 
directed to make them into pieces of furniture and return 
them to the owner. This is an express contract of bail- 
ment. 

One who sees a pocketbook apparently lost may pass 
by it and not become a bailee but if he picks it up and 

118 



BAILMENTS 119 

takes it with him, he is a bailee and has the rights and 
duties of a bailee under an implied contract. 

Parties to a bailment. The party delivering the chattel 
(personal property) is called the bailor. 

The party receiving the chattel and who is bound to 
redeliver is known as the bailee. 

Title. The title in a bailment does not pass. In this 
respect it differs from a sale, a barter, a gift or a mortgage, 
(see p. 100). The title passes in these four transactions 
though it passes subject to defeat in the case of a mortgage. 

Classes of bailments. Bailments are usually divided 
into three classes. 

1. Bailments for the bailor^s sole benefit, 

2. Ordinary bailments for mutual benefit, 

3. Bailments for the bailee^s sole benefit. 

In addition to these three general classes there are the 
exceptional bailments for mutual benefit, which involve: 

(a) Postmasters, 

(b) Innkeepers, 

(c) Common carriers. 

BAILMENTS FOR BAILOR'S SOLE BENEFIT 

Gratuitous bailments. If the bailment is for the sole 
benefit of the bailor it is called a gratuitous bailment — 
(gratuitous: without expectation of reward). 

Responsibility of gratuitous bailee. Although the bailee 
agrees to perform the purpose of the bailment yet he 
cannot be compelled to perform against his wishes. Being 
a gratuitous agreement there is no consideration. Being 
without consideration there is no contract. Being no 
contract there is no right of action. 



120 BAILMENTS 

Termination, A gratuitous bailee may end the bailment 
at any time he desires by redelivering the object of the 
bailment. 

BAILMENTS FOR MUTUAL BENEFIT 

Recompense. This class differs from the others in that 
there is recompense in this group, while the other classes 
are gratuitous. 

The recompense need not be money necessarily. It 
may be anything of benefit. The recompense may be 
expressed or implied. 

In Peck vs. Brewer, 48 111. 54, Peck delivered to Brewer 618 head 
of sheep. Brewer was to keep them for three years and use their 
wool. But he was to deliver to Peck 23^ lbs. of wool each year for 
each and every sheep. This was held to be a bailment for mutual 
benefit. Peck was relieved of the care of the sheep and was given a 
part of their wool, while Brewer was allowed to keep and use the 
balance of the wool. 

What they include. Bailments for the parties' mutual 
benefit include all ordinary bailments for mutual advantage 
as well as the special bailments involviug: 

1. Postmasters, 

2. Innkeepers, and 

3. Common carrier's bailments. 

Classes of ordinary bailments. The ordinary bailments 
may be divided into three classes where parties are hired 
to work. They are hired: 

1. To take care of a chattel, or 

2. To work on the chattel, or 

3. To transport it (private carriers). 



BAILMENTS 121 

In addition to these three classes there is the baihnent 
for security, known as pawn or pledge. 

Examples of bailee taking care of a chattel. The 
safety deposit vault keepers for hire are bailees of this 
class. 

Allen pays Clark to keep his automobile in the latter's 
garage. Clark is a bailee of this class. 

When a railroad stores freight in its warehouse for 
others it is a bailee in this group. 

Examples of bailee working on a chattel. A suit of 
clothes is sent to the tailor to be cleaned. The tailor is a 
bailee to work on the chattel. 

Gold is given to a jeweller to be made into a ring. This 
illustrates this class. 

An automobile taken to a garage owner for repair is 
another illustration. 

Example of bailee transporting a chattel, A boy is hired 
to carry packages for a neighbor. The boy is a bailee of 
this group. He is a private carrier. 

Private carriers (as distinguished from common carriers) 
are not of much importance in business law. Common 
carriers will be discussed at length (see p. 132). 

Example of bailment for security. A bailment to secure 
the payment of a debt is known as a pledge or pawn. 
Probably the best known bailee of this class is the pawn- 
broker. 

Attention has already been called to the fact that in a 
bailment the title does not pass. In a mortgage it does 
pass, although subject to defeat. The pawnbroker has a 
special interest in the goods pawned and he is allowed 
to sell them if unable to collect the debt after giving 
notice. 

Generally the pawnbroker is not allowed to use the 
pawn. 



122 BAILMENTS 

In McArthur vs. Howeit, 72 111. 359, the court held that the 
pledgee who was in possession of a sewing machine had no right to 
use the machine. 

Lien. The bailee is allowed to keep the chattel until he 
receives his pay. This right to keep the chattel is known 
as a lien. 

In Tumalty vs. Parker, 100 111. App. 382, Parker's horse was in 
Tumalty's stable. The court held Tumalty had a lien on the animal 
for his care. 

The lien lasts only while he has the chattel. If he 
allows the owner to remove it he cannot compel a return 
of the property. 

Termination. When the object of the bailment is com- 
pleted the bailment is ended, or it may be terminated 
sooner if the parties agree to end it. 

In Dupee vs. Blake, 148 111. 453, warehouse receipts were pledged 
as security for a loan by a bank. Later the bank took a quit-claim 
deed to some real estate in satisfaction of the loan. The court held 
this later act released the receipts and so ended the bailment of them. 

At that time there should be redelivery by the bailee 
and payment by the bailor. 

Where redelivery is made to the wrong party the bailee 
is liable. 

In Indianapolis and St. Louis R. R. Co. vs. Herndon, 81 111. 143, 
a railroad company was held liable for a number of fruit trees which 
it had delivered to the wrong party. The shipper directed them 
sent to his own address, which meant that the company was to 
hold them until he authorized a delivery to another party or to the 
party who purchased them. The company, however, delivered them 
at once to the purchaser because he called for them and offered to 
pay the freight. The purchaser had not paid for the trees and never 
did pay for them and the railroad company was held liable. 



BAILMENTS 123 

If the bailee refuses to deliver the property the bailor 
can recover in a law suit. 

In Leonard vs. Dunton, 51 111. 482, grain was delivered to a 
warehouseman to be kept for a short time without charge and to be 
delivered to the owner when demanded. In an action against the 
warehouseman who refused to deliver up the grain on demand, it 
was held that he was liable for the value of the grain at the time of 
the demand and refusal. 



BAILMENT FOR BAILE^E'S SOLE BENEFIT 

Gratuitous. There can be no such thing as a loan by a 
bailor unless the property was taken with his consent. All 
bailments in this class are gratuitous as are those for the 
bailor's sole benefit. 

When a party borrows an animal which must be fed and 
cared for, it is usually considered a gratuitous bailment. 
The cost of keeping it does not constitute such considera- 
tion as to make it a mutual benefit bailment. But if the 
parties expressly agree that it is to be the consideration 
there is a bailment of the mutual benefit class. 

In Howard vs. Bahcock, 21 111. 259, the plaintiff purchased a 
team of horses from the defendant, but having no immediate use for 
them he told the defendant he could keep them, use and take care 
of them, until he was ready to take them on a trip to Texas, about 
three months later. He stated to the defendant that it would be an 
accommodation to him for the defendant to keep the team. Held, 
that the bailment was for the mutual benefit of both parties, and in 
a suit for the value of one of the animals which died while in the 
possession of the defendant, the defendant was only required to show 
that he took such care of the property as ordinarily prudent men 
take of their own property. 

Termination. Bailments of this class may be terminated 
by either the bailor or bailee. 



124 BAILMENTS 



CARE REQUIRED IN ORDINARY BAILMENTS 

In generaL The care required of each bailee and the 
negligence for which he is answerable is shown below: 





Care Negligence for which 


Class. 


required. he is answerable. 


Bailor's Sole Benefit 


Slight Gross 


Ordinary Mutual Benefit 


Ordinary Ordinary 


Bailee's Sole Benefit 


Great Slight 



In the case of Postmasters there is a greater responsibility 
than in any of the above cases and in the cases of Innkeepers 
and Common Carriers we have examples of responsibility 
that almost amounts to insurance of the chattels. 

Contracts changing liability. The table given above sh o ws 
the liability of the bailee in each class, unless there is a spe- 
cial contract made by the parties changing the liability. 

The responsibility of a bailee may usually be limited by 
a special contract. But this contract cannot be contrary 
to public policy. For instance a common carrier is never 
allowed to restrict its liability as to its own fraud or its 
own negligence. 

In Pennsylvania R. R. Co. vs. Purvis j 128 111. App. 367, Purvis 
worked for the railroad company. He applied for a vacation and a 
pass on the road, which was granted. On the return trip he was 
injured by the negligence of the train men. The pass said, '^The 
person accepting and using this pass, thereby assumes all risk of 
accident and damages to person or property. '* The court held that a 
railroad company cannot, by contract, exempt itself from liability 
for negligence. 

Definitions of degrees of care. Ordinary care has been 
defined as such care as a reasonably prudent man would 
exercise toward the safety of like property under like 
conditions. 



BAILMENTS 125 

In Cloyd vs. Steiger, 139 111. 41, Cloyd sold several head of cattle 
to Steiger. He was to make delivery one month after the date of 
sale and during that month he was to feed the cattle on corn. 
Steiger took a few of the steers when the month was up but left 
quite a number in Cloyd's possession. Cloyd failed to feed corn to 
the cattle which remained in his possession after the date of delivery 
and they deteriorated in value. It was held that although Cloyd was 
not bound to keep the cattle longer than the time fixed for delivery, 
yet if he kept them after that date, willingly or unwillingly, he was 
bound to treat them with such care as reasonably prudent men 
under like circumstances would treat their own cattle, and if ordi- 
nary care required the feeding of the cattle on corn, he was required 
to do so. 

Slight care is less than ordinary care. 

Great care is more than ordinary care. 

What is slight care and what is great care depends upon 
all the circumstances in any particular case. It is not 
expected that the bailee give as much attention to a load 
of bricks as to a dozen week-old chickens. 

Examples showing care required. A bailee who agrees 
to take a bailment for the bailor's sole benefit is not re- 
quired to fulfill his promise, there being no consideration. 
But if he undertakes to perform the bailment he must 
complete it and he must exercise at least slight care. 

In Coggs vs. Bernard j Ld. Raym. 909 (a famous English case), 
Coggs wanted several hogsheads of brandy removed from one cellar 
to another. Instead of employing a regular porter he accepted the 
gratuitous services of his friend, Bernard, who volunteered to move 
them safely and securely. In moving the brandy one of the casks 
was staved and the liquor was spilled into the street. In an action 
against Bernard, Coggs was allowed to recover for the spilt liquor, 
notwithstanding Bernard was to receive nothing for his trouble. 

A bailee who agrees to take a bailment for mutual 
benefit must fulfill his promise, because there is considera- 
tion. He is liable for at least ordinary care. 



126 BAILMENTS 

A customer hung his hat on a rack in a barber shop. 
While he was being shaved some one stole it. The court 
held the proprietor liable because of lack of ordinary care. 

In Spangler vs. Eicholtz, 25 111. 297, Eicholtz left eight bushels 
of wheat in Spangler's mill, to be manufactured into flour. The 
wheat was lost but the sacks which had contained the wheat were 
found in the defendant's mill, filled with bran. There was no 
evidence that the defendant was notified that the sacks of wheat had 
been left in his mill, but it was held that the presence of the sacks in 
the mill after the wheat had been removed was sufficient proof to 
render the defendant liable for the value of the wheat. It was 
further held by the court that when grain is left with a miller, to be 
manufactured into flour, ^Hhere is an implied promise that he will 
use reasonable care and diligence for its preservation and will return 
it on demand.'' 

A bailee who takes the bailment for his sole benefit is 
bound to exercise great care. If he is guilty of slight 
negligence he is liable. This is because the bailor is doing 
him a favor. 

In Geist vs. Pollock, 58 111. App. 429, Pollock on July 7, 1893, 
deposited $500 with Geist Brothers, taking this receipt: '' Chicago, 
July 7, 1893. Received from George Pollock five hundred dollars 
on deposit. Geist Brothers." Pollock told them he would not want 
the money till March 1, 1894. That night the money was stolen. 
On two former occasions he had deposited money with them, which 
had been returned — not in the same money but by other money and 
a check. Had it been a special deposit — the same package to be 
returned — Geist Brothers would not, under the circumstances, have 
been liable. As it was, the deposit was regarded as a loan, to be 
repaid, no matter what became of the money. 

Hagehush vs. Ragland, 78 111. 40, was a suit to recover for injuries 
to a horse which the plaintiff had loaned to the defendant without 
hire, to enable the defendant to visit her brother. The animal was 
used for said purpose and while on the journey the husband of the 
defendant was seen beating the animal, the witness testifying that 



BAILMENTS 127 

he heard the blows for nearly a quarter of a mile. The horse died a 
few days after it was returned to the plaintiff, and he was allowed to 
recover its value. The court held that ''where an animal is borrowed 
without hire, the borrower is bound to use extraordinary care of the 
same, and for any failure of such duty, resulting in injury to the 
lender, the borrower will be Hable." 

When a bailee puts the chattel to an improper use, con- 
trary to the contract, he becomes absolutely liable as an 
insurer. 

Gray hired a horse of Kingsberry to drive frora 

Chicago to a town ten miles north but drove instead 

. sixteen miles north. The horse died through no fault of 

the bailee but he was liable because he broke his contract. 

EXCEPTIONAL BAILMENTS 

Kinds, There are three exceptional classes of bailments 
for mutual benefit. They involve : 

1. Postmasters, 

2. Innkeepers, 

3. Common carriers. 

POSTMASTERS 

Importance of subject. The question of the HabiHty of 
Postmasters has been, for the most part, theory. There are 
very few cases that deal with their liability. They are bound 
to use great care. They may be sued for misconduct. 

In Teal vs, FeltoUy 12 Howard (U. S.) 284, the postmaster at 
Syracuse, N. Y., refused to deUver a newspaper until postage was 
paid on it — demanding postage because of an initial written on the 
wrapper. The plaintiff sued and recovered a judgment of six cents 
as damages. This was in the Justice of the Peace Court. The post- 
master appealed the case four times and lost in all the courts — the 



128 BAILMENTS 

County Court, State Supreme Court, State Court of Appeals and 
the United States Supreme Court — it being held that the post- 
master was guilty of misconduct in not delivering it without extra 
postage. 

INNKEEPERS 

Why treated under bailments? The question may well 
be asked why innkeepers are treated under the subject of 
bailments. The reason is because the personal property 
of the guests is a subject of bailment. 

Who is an innkeeper? An innkeeper is one who holds 
himself out to the public for the entertainment and lodging 
of guests. 

A hotel keeper is an innkeeper but a restaurant owner 
is not. 

In Sheffer vs. Willoughhy, 163 111. 518, the plaintiff ate an oyster 
stew at the defendant's restaurant. She became sick immediately 
thereafter and was ill for some weeks. In an action for damages the 
court said: ^^ As respects the goods of a guest which he takes with him 
when he stops at an inn, the innkeeper is practically an insurer, and 
where an action is brought to recover for goods lost, the guest is only 
required to show the existence of the relation of innkeeper and guest, 
and the loss, to authorize a recovery. But as to food served at a 
restaurant, such as oysters, ice cream and the hke, we are not aware 
that a similar rule establishing liability ever existed. There is no 
similarity between the two cases, and the principle that governs one 
does not apply to the other. If a person keeping a public restaurant 
fails to exercise ordinary care in furnishing food to his patrons and 
damages result, he will be Hable if his business be conducted in a 
careless or negligent manner and through such negligence a patron is 
injured. But where an action is brought to recover damages the 
burden is upon the person bringing the action to establish careless- 
ness or negligence." 

Neither are sleeping car companies innkeepers. 

In Pullman Palace Car Co. vs. Smith, 73 111. 360, the Pullman 
company was held not liable as an innkeeper for money stolen from 



BAILMENTS 129 

a passenger while occupying one of its sleeping cars, on a trip from 
Chicago to St. Louis. Neither could the company be held liable as 
a common carrier, as the passenger^s contract for transportation was 
with the railroad company and not with the Pullman company. 

Difference between boarding house keeper and inn- 
keeper. A boarding house keeper may choose his guests. 
He may charge one more than another. He can give one 
better service than others. He can cause guests to leave 
without cause. The innkeeper can do none of these 
things. 

Who is a guest? One who comes to an inn to receive 
entertainment and lodging is usually considered a guest. 
But all the circumstances must be considered in deciding 
who is a guest. 

In Bullock vs. Adair, 63 111. App. 30, Bullock kept a European 
hotel with cafe attached. He claimed in his ''rules and regulations " 
the benefit of ''an act for the protection of innkeepers.'^ Ada Adair 
lodged and ate at the hotel from August 28th to September 6, 1894. 
She returned and lodged, but did not eat there, from October 10th 
to October 30th. December 24th she returned again and lodged only 
until April 1, 1895. On March 6th her cloak was stolen. She sued 
Bullock and recovered $60. The court held that though she rented 
a room by the week for more than three months, she was a transient, 
and therefore a guest and entitled to be protected as such. 

Whom innkeeper must receive. The innkeeper is bound 
to receive every person who presents himself in a fit con- 
dition, if he offers to pay and if there is room. If the would- 
be guest is drunk the innkeeper need not receive him. 
Neither must he receive one who has a contagious disease, 
nor one who is a rioter, nor it would seem a suspicious 
character. And it seems that he may eject one who fails 
to observe the reasonable rules of the inn. 

Liability. The innkeeper is liable for any property that 
the guest brings to the inn. 



130 BAILMENTS 

In Williams vs. Moore, 69 111. App. 618, Moore engaged a room at 
the hotel conducted by Williams and delivered to the hotel clerk a 
check for a trunk in the custody of the Michigan Central Railway. 
The hotel had no facilities for transporting baggage so the clerk 
gave the check to a man who engaged in that business. This man lost 
the trunk but the court held the hotel company liable on the ground 
that the delivery of the check to the clerk put the baggage of the 
guest in the custody of the hotel. 

The innkeeper is not liable for every loss. He is excused 
when the loss is caused by: 

1. An act of God, ^ 

2. An act of public enemy,* 

3. An act of the guest, 

4. An act of public authority,* 

5. The nature of the goods themselves.* 

The loss of a guest^s property is strong evidence in 
itself that the innkeeper was negligent. 

Rockhill vs. Congress Hotel Co., 237 111. 98, was a suit against 
the hotel company for the value of a hand-bag and its contents. The 
bag had been left with the porter of the hotel who was to have 
checked it for transportation. When the guest went to get her checks 
for her baggage, including the handbag, the check for the latter was 
missing and the bag was never recovered. The hotel company could 
not explain the loss and was held liable. (The Innkeepers' Act now 
in force requires guests at an inn to deliver their valuables to the 
innkeeper for deposit in a safe.) 

But if the innkeeper was not negligent he may prove 
the fact. 

In Hulhert vs. Hartman, 79 111. App. 289, Hartman, a guest of 
the hotel, had money stolen from his room by some one who evident- 
ly entered by the door. The door had ample locks and bolts but 
Hartman could not remember whether he had locked it. It was held 
that the loss resulted from his own negligence. 

* See under common carriers, page 135, for explanation. 



BAILMENTS 131 

In Kelsey vs. Berry, 42 111. 470, when the plaintiff stopped at 
the inn he allowed another guest who got off the stage coach with 
him to take his valise into the hotel. When this other guest left the 
hotel he took the plaintiff's valise with him and the plaintiff sued the 
innkeeper for the loss. Held, that the plaintiff could not recover 
because he was negligent in allowing the other guest to assume owner- 
ship over the valise, thereby leading the hotel authorities to believe 
that the thief went off with his own property. 

In Metcalf vs, Hess, 14 111. 129, a guest at an inn had a horse 
which he left in the innkeeper's stable. During the night the horse 
was hung by the rope by which it was tied and the guest brought 
suit for damages for its death. Held, that as to animals left at an 
inn the innkeeper is not an insurer, but he may show that injuries 
to animals left in his care were not caused by any negUgence on his 
part and satisfactory proof of due care will excuse him. In this case 
it was proved that the animal was tied in the customary way but 
that it became vicious because of a disease or ill-temper, which 
resulted in death and the plaintiff could not recover. 

Just because a restaurant keeper is not an innkeeper it 
must not be presumed that he is under no liability for 
losses. 

In LaSalle Restaurant vs. McM asters, 85 111. App. 677, McMasters 
went into the restaurant and handed his coat to a waiter who 
promised to take care of it. It is admitted that the restaurant 
company were not innkeepers but the court held the company liable 
for proper care of the coat on the ground that the waiter was agent 
of the company. 

The innkeeper's liability does not end when the guest 
has paid his bill and left. The guest has a reasonable time 
afterward to get his baggage. 

Lien. The mnkeeper has a right to hold the baggage and 
other valuables of the guest to secure payment of his bill. 
But once the innkeeper has allowed the guest to remove 
his baggage and other valuables the lien is lost. He cannot 
compel the guest to return tbem. 



132 BAILMENTS 

COMMON CARRIERS 

Defined and explained. A common carrier is one who 
holds himself out to the public to carry personal property 
for recompense. 

It is essential that the common carrier receive or be 
justified in expecting to receive pay for carrying the 
chattels. Otherwise he is a mere gratuitous bailee and 
liable only for great negligence instead of slight negligence. 

It is not necessary that the amount be expressly agreed 
upon in advance as the law presumes payment in many 
cases. 

Who are common carriers? A person or company 
operating a bus line is a common carrier. 

Parmelee vs. McNulty, 19 111. 556, was a suit against the Parmelee 
bus line in Chicago for the loss of a trunk. The court held the bus 
line was a common carrier. 

Express companies are conmion carriers. 

In Boscowitz vs. Adams Express Co., 93 111. 523, three bales of 
furs were delivered to the express company for transportation from 
Chicago to New York. A broken rail caused a wreck of the train and 
the furs were destroyed by fire. The express company was held liable 
as a common carrier even though the wreck was the result of the 
negligence of the railroad company. 

Railroads are common carriers but in the transportation 
of mail they are not common carriers but mere agents of 
the United States government. 

Telegraph and telephone companies are not common 
carriers although many cases decide to the contrary — 
these latter cases holding them to be ^^ carriers of messages 
and common carriers of intelligence.'^ They are held to 
almost as great a responsibility as common carriers. 



BAILMENTS 133 

Tyler y Ullman & Co. vs. Western Union Telegraph Co., 60 III. 
421, was an action against the telegraph company for damages 
caused by a mistake in a telegram sent from Chicago to New York. 
While the company was held not to be a common carrier it was held 
bound to transmit accurately any message delivered to it and if a 
mistake is made it is bound to show that it was not the result of 
the negligence of the company or of its agents. It was further held 
that the company could not, by rules printed on the message blank, 
require the sender to have the message repeated back to the sending 
office if he expected to recover any more than the amount paid for 
the service in case a mistake is made and damages arise. 

A sleeping car company is not a common carrier because 
its object is to furnish sleeping quarters and not to trans- 
port people. 

The Pullman Palace Car Company vs. Smith, 73 111. 360, (cited on 
p. 128), holds that sleeping car companies are not common carriers 
but are held to a strict accountability. 

Nevin vs. Pullman Palace Car Co., 106 111. 222, was a suit against 
the car company for refusing to let the plaintiff occupy one of its cars 
while en route from Dubuque, Iowa, to Chicago. The plaintiff offered 
to pay the customary charge for a berth but was told by the con- 
ductor that he could not give him a berth because 'Hhey were not 
made up.'' Held, that the Pullman Palace Car Company is simi- 
lar to an innkeeper in its obligation to furnish accommodations to all 
who apply therefor in the customary way and to whom no personal 
objection is apparent. 

What goods must the carrier receive? The common 
carrier is bound by law to carry any chattel for a reasonable 
price, provided: 

1. That it is in its line of work, and 

2. It has a safe conveyance. 

What is a reasonable price depends upon all the circum- 
stances. The state can legally regulate the prices to be 
charged. 



134 BAILMENTS 

But the carrier is not bound to carry things not in its 
hne of work. For instance a carrier of small packages is 
not bound to carry an iron safe weighing several tons. 

Neither is a carrier obliged to accept goods when it has 
no safe conveyance or when his conveyance is full. 

Galena and Chicago Union R. R, Co, vs, Rae, 18 III. 488, was an 
action against the railroad company for refusing to carry grain from 
Rockford to Chicago. The evidence showed that the company had 
the necessary means and facilities for transporting the grain ordinari- 
ly, but at the time when it was offered for shipment there was an 
unusual and extraordinary quantity of grain to be shipped, owing 
to the great harvest at that time and the want of facihties for 
storing the grain. Held, that the company was not bound to provide 
in advance for, or anticipate, extraordinary occasions, or an unusual 
influx of freight to the road. 

Ordinarily if a carrier does accept goods it is bound to 
furnish safe vehicles for the purpose intended. 

But in Illinois Central R, R. Co. vs. Hall, 58 111. 409, it was held 
that the railroad company was not hable for the loss of hogs which 
escaped from a car, when Hall refused to accept the cars of the 
Illinois Central and required the company to use cars of another 
railroad company. 

A railroad company is not bound to carry goods over the 
tracks of another company if it has no tracks of its own to 
any given location. 

People vs. Chicago and Alton R. R. Co., 55 111. 95, was an action 
to compel the railroad company to accept a shipment of grain to an 
elevator in Chicago. The company refused to carry the grain 
farther than the terminal of its own tracks in the city and it was 
held that it was not required to make use of a switch track which 
connected with the elevator but which was controlled by other rail- 
roads and was never used by the Chicago and Alton unless a special 
contract was entered into v/ith the road operating the switch track. 



BAILMENTS 135 

Carrier almost an insurer. The common carrier is an 
insurer except that it will be excused from paying losses in 
five cases. These are losses caused by: 

1. Act of God, 

2. Act of public enemy, 

3. Act of shipper, 

4. Act of public authority, 

5. Nature of the goods themselves. 

Act of God. By act of God is meant an irresistible force 
for which man is in no way responsible. Examples of this 
are lightning, winds, and sudden death. 

It is sometimes difficult to decide whether the direct 
cause was or was not an act of God. 

In Wald vs. Pittsburg, Cincinnati, Chicago and St. Louis R. R. 
Co., 162 111. 545, a passenger purchased a ticket from Cincinnati 
to New York City. He checked his trunk as baggage for the same 
destination. His ticket called for passage on the limited train from 
Chicago but he could not get this train until he reached Pittsburg. 
Here he took the limited but for some reason his baggage remained 
on the slower train and his train was overtaken by the flood at 
Johnstown, Pa. He sued for the loss of the trunk and the court held 
that even though the flood was an act of God, the company was 
responsible for not having the baggage transferred to the fast train 
which passed Johnstown before the flood came. 

Fire does not come under this heading except when it is 
caused by lightning. 

Merchants' Despatch Transportation Co, vs, Theilbar, 86 111. 71, 
was a suit to recover for the loss of goods shipped from Hartford, 
Connecticut to Peoria, Illinois. While the goods were lying in the 
yards at Chicago waiting to change trains they were destroyed by 
the great fire of October 9, 1871. The company was held Hable for 
the loss, even though a clause in the receipt for the goods, accepted 
when they shipped, expressly exempted the company from liability 



136 BAILMENTS 

for loss by fire. The general rule is that a cnrrier cannot exempi 
itself from this liabihty unless it is proved that the shipper had 
notice of the exemption and shipped the goods notwithstanding. 

Act of public enemy. Countries at war with the United 
States are public enemies, and their acts will excuse the 
common carrier. 

Mobs are not public enemies in this sense. While 
strikers are not considered as public enemies yet their 
interference may excuse a delay in delivery. 

Pittsburgh J Ft. Wayne and Chicago R. R. Co. vs. Hazen, 84 111. 
3G, was a suit against the railroad company for delay in delivery of 
a quantity of cheese from Chicago to New York. The shipment was 
six days late and during the last five days the weather turned so 
cold that the cheese was frozen when it reached New York. The 
delay was caused by a strike of the employees of the railroad com- 
pany. As soon as the strike was declared the company discharged 
the strikers and employed other men in their stead. The discharged 
employees then by lawless violence prevented the new employees 
from doing duty. Held, that the company was not responsible for 
delay caused by the lawlessness of men who were no longer in its 
employ, but had the delay been caused by the failure of the company 
to supply the places of the strikers, it would have been liable. 

Act of shipper. When the shipper is at fault reason and 
justice demand that the carrier be excused and such is the 
law. 

In Illinois Central R. R. Co. vs. Hall, 58 111. 409 (cited on 
p. 134), the company was excused because Hall required the 
railroad to use other cars against the wishes of the officials of the 
common carrier. 

If the shipper deceives the carrier the latter is not liable. 

The courts have held the shipper must bear the loss in 
many instances when he has failed to reveal the contents 
of his shipment. 



BAILMENTS 137 

In American Express Co. vs. Perkins, 42 111. 459, the plaintiff 
delivered to the company a package, containing a wreath, to be 
taken from Decatur to Cairo. The wreath was partially made of 
glass, and when it arrived at Cairo the glass was broken. In an action 
against the express company it was held that the plaintiff should 
have informed the company that the article was made of glass, 
and as there was no evidence of such information the company 
could not be held Uable for the breakage. 

In C. & A. R. R. Co. vs. Shea, 66 III. 471, the court held that 
where a shipper delivered a bundle that appeared to be bedding onl}^, 
but contained silk and furs, and shipped them at a lower rate to 
defraud the company, that the company was not liable for their loss. 

Act of public authority. When the pubUc authority pre- 
vents the deUvery of goods the carrier is excused. 

One example of this is when goods are seized by the 
sheriff. Another is when roads are under control of the 
government. 

Phelps vs. Illinois Central R. R. Co., 94 111. 548, was an action 
against the Illinois Central Railroad Company for refusing to ship 
corn from Bloomington to Cairo in the year 1865. At that time the 
company was under the control of the United States government in 
carrying troops and supplies to the Civil War front. Held, that 
under such conditions there was no liability of the defendant as a 
common carrier for refusing to receive the corn which was offered 
for carriage. 

In Illinois Central R. R. Co. vs. Hornberger, 77 111. 457, corn was 
stored in a warehouse near the railroad on promises by the company 
that it would be transported to its destination as soon as cars could 
be procured for the purpose. The company was then under the 
control of the military authorities of the Federal government and 
could not get permission of the government to ship the corn, which, 
remaining in the warehouse, became spoiled. Held, the company 
was not liable. 

Nature of the goods themselves. It may be that the 
carrier will be excused from the loss or damage to goods 



138 BAILMENTS 

because of the nature of the goods. One example of this 
is when apples become over-ripe and spoil in transit. 

Cattle were shipped by railroad and becoming frightened 
one was killed by the others. The company was not liable. 

When Uve stock is carried the carrier is bound to see 
that they are properly cared for on the journey, but the 
shipper should send a caretaker to feed and water the 
stock. 

Illinois Central R. R. Co, vs, Adams, 42 111, 474, was an action 
against the railroad company for failure to apply water to a carload 
of hogs while en route from Clinton to Chicago. Witnesses testified 
that the company could have watered the hogs at Bloomington or 
at Normal but that the conductor refused to do so, even at the 
request of the owner. Some of the hogs became overheated and died, 
and the company was held hable. The opinion emphasized the point 
that the owner did not have the facilities for pouring water on the 
hogs and that it was customary for the carrier to do so from water 
tanks stationed at the different stopping places for watering the 
engine. 

When liability begins. The general rule is that the 
sarrier^s liability begins when it accepts the goods for 
shipment. 

In Illinois Central R, R. Co, vs. Smyser & Co,, 38 111. 354, the 
plaintiffs received a load of cotton from a steamboat at Cairo and 
placed the bales on the wharf, near the sidetrack of the defendant 
railroad company. The company, on request, furnished an empty 
car for shipment of the cotton and the plaintiffs loaded the cotton 
on the car. While the loaded car was standing on the track, twenty- 
nine of the bales of cotton were consumed by fire, caused by a spark 
from a passing locomotive. The company was held to have accepted 
the cotton for transportation and was liable for its loss even though 
no receipt or bill of lading had been issued. 

If the carrier cannot transport the goods immediately 
but is willing to store them until they can be transported, 
it is a mere bailee — a warehouseman, not a common carrier. 



BAILMENTS 139 

In St. Louis, Alton and Terre Haute R. R. Co. vs. Montgomery, 
39 111. 335, the plaintiff delivered to the railroad company, for trans- 
portation, a quantity of hay, which was placed on platform cars. 
The next day, when the company was about to send it forward, the 
plaintiff requested that it should not be taken away until he could 
first see the party to v/hom it was sold, which request was complied 
with, and the next day the hay was ignited by sparks from a passing 
locomotive, and a portion of it burned. In an action against the 
company for the value of the hay thus destroyed, it was held that 
from the moment the plaintiff requested the hay to be detained, the 
hability of the company was only that of a warehouseman. It was 
held that it was not a want of ordinary care for the company to 
leave the hay where the plaintiff requested it should be left. It was 
proved that the railroad company used all possible diligence to 
prevent the escape of sparks from its passing locomotive, and the 
plaintiff could not recover. 

In Grand Tower Manufacturing and Transportation Co. vs. 
Ullmanj 89 111. 244, it was held that where goods are dehvered to a 
carrier for transportation, and are placed in the depot or warehouse 
awaiting transportation with nothing further to be done by the 
owner or shipper, and they are burned before being shipped, the 
company so receiving them will be liable as a common carrier, and 
not merely as a warehouseman. 

In the first of these last two cases the delay v^as due to 
the act of the shipper while in the second case the delay 
was not the fault of the shipper. 

Liability under special contracts. Common carriers may 
limit their common law liability by special contract. But 
the carrier and shipper must agree, mere notice by the 
carrier is not enough. The company cannot limit its 
liability by putting a condition in the receipt. 

In Erie Ry. Co. vs. Wilcox, 84 111. 239, it was held that a carrier 
cannot discharge itself from duties which the law has annexed to 
the employment, by notice alone, to the shipper. The shipper must 
assent to it, to make it effectual. 



140 BAILMENTS 

But the carrier under no circumstances is ever allowed 
to limit its liability for negligence or misconduct. 

In Chicago and Northwestern Ry. Co. vs. Chapman ^ 133 111. 96, 
the railway company, on the deUvery of a number of horses to it 
for transportation, gave to the owner^s agent a contract or receipt, 
in which it was stated, that in consideration of special rates the 
company assumed no hability on horses for more than $100 per head. 
The train colhded with a construction train and one of the horses, 
being a very valuable pacing race horse, was so injured as to be 
worthless. Held, that the clause in the contract attempting to limit 
a recovery to $100, as against gross neghgence, was void, but if the 
injury had been caused by any casualty against which the carrier 
might have contracted, the limitation, if knowingly assented to by 
the shipper, might govern. It was further held that if the value of 
freight is agreed upon and the contract of shipment is based on such 
value the amount thus fixed would ordinarily determine the liability 
of the carrier. But if untruthfully given in respect to property that 
the carrier has less opportunity to inspect or know the value of than 
the shipper, it will not stop the carrier from showing the value was 
less than that fixed. 

Express companies may have a definite sum for liability 
when no amount is declared by the shipper. 

Delivery. The common carrier is liable if a loss is caused 
by delay in the delivery. It must deliver within a reason- 
able time. 

In Michigan Central R, R. Co. vs. Curtis, 80 111. 324, during the 
late October and the early part of November certain fruit trees were 
being shipped from New York to Freeport, via Detroit and Chicago. 
The Michigan Central handled the shipment from Detroit to 
Chicago and there was an unusual delay in the goods reaching 
Chicago. The weather turned cold and the fruit trees were frozen 
when they reached their destination. Held, that the Michigan 
Central was liable for failure to deliver the trees to the connecting 
road in Chicago in the time ordinarily required for such a trip. 

Common carriers by water are not required to make 
personal delivery, nor are railroads. They need merely 



BAILMENTS 141 

give notice to the owner. But this notice must be actu- 
ally received. Merely printing such notice in a news- 
paper without proving that the notice was read is not 
sufficient. 

Express companies must make personal delivery, al- 
though they are justified in refusing to deliver personally 
at small stations where the employment of messengers or 
wagon drivers is not reasonable. 

In American Merchants' Union Express Co, vs, Schier, 55 III. 
140, a trunk was sent from Bremen, Germany, to Galena, Illinois, 
and from Galena to West Goshen, Connecticut. West Goshen was 
reached only by stage coach, and the custom was for the carrier to 
have goods destined for West Goshen sent from the nearest railroad 
station by stage to the postoffice in West Goshen where the consignee 
would inquire for his shipment. The express company which was 
entrusted with the transportation of the trunk did not undertake 
to forward it by stage to West Goshen and did not notify the party 
to whom the trunk was shipped of its arrival at the railroad station. 
The trunk remained in a warehouse at the railroad station and was 
destroyed by fire. The express company was held liable for the loss 
of the trunk. 

In cases where personal delivery is not necessary, notice 
must be sent to the party who is to receive the goods and 
after a reasonable time has elapsed the carrier ceases to be 
treated as a common carrier and is only held liable as a 
warehouseman. 

But in Gregg vs. Illinois Central R. R, Co,, 147 111. 550, it was 
held that the railroad company was not liable, even as a warehouse- 
man, where the consignee had notice of the arrival of a shipment of 
corn but did not remove the grain, and the railroad company, in the 
exercise of due care had the grain stored with a reliable warehouse- 
man. The corn was damaged in the warehouse by an unprecedented 
flood, but it was held that even if the injury was the result of 
negligence on the part of the warehouseman, the railroad company 
would not be liable therefor. 



142 BAILMENTS 

As a warehouseman it is liable for lack of ordinary care, 
while as a common carrier it is liable almost as an insurer 
of the goods. Consequently it is important to know 
whether the carrier is liable as a common carrier or ware- 
houseman. 

Must be to the right person. The delivery must be to 
the right person. No fraud or mistake will excuse the 
carrier if it delivers to the wrong person. It is bound 
absolutely to deliver to the rightful claimant. 

In Pacific Express Co. vs. Shearer, 160 111. 215, an impostor who 
knew that the agent of a live stock firm was purchasing stock in 
Kansas for shipment to the firm in Chicago, sent an order from a 
Kansas town to the firm for $4000 to pay for cattle he was buying. 
The order was sent in the agent's name and the impostor used this 
name at the hotel where he was stopping. The money was sent by 
express to the town whence the order came, and the impostor 
inquired at the express office for the money and on identification 
by the hotel clerk and a copy of the telegram he received from the 
firm saying the money had been sent, the express company dehvered 
him the money. He left town and was never again heard from. 
Soon thereafter the real agent who had been doing business in 
another town in Kansas went to Chicago and discovered the fraud. 
It was too late to recover the money and the live stock firm sued 
the express company. Held, the company was liable even though 
the money had been delivered to the party who had ordered it. 
The money was addressed to the agent in his own name and the 
company should have delivered it to the right party regardless of 
whether he ordered it or not. 

In American Merchants^ Union Express Co. vs. Milk, 73 111. 
224, the express company delivered a package to a party who had 
formerly been employed by the shipper as a clerk. When he first 
asked for the package the company's agent told him to get an order 
from the shipper. He afterward presented an order, which pur- 
ported to have been signed by the shipper, and he was allowed to 
take the package. This order turned out to be a forgery. The 
forger disappeared with the package and the express company was 
held liable. 



BAILMENTS 143 

CARRIERS OF PASSENGERS 

Why treated under bailments? Carriers of passengers 
are not treated under bailments because of the passengers 
but because of the baggage that is an incident of travel. 

Who is a carrier of passengers? Whoever holds himself 
out to the public to carry passengers for hire is a carrier of 
passengers. Two things are necessary. He must: 

(1) Hold himself out to the public as a carrier, 

(2) For hire. 

It will be seen that railroad passenger trains, street rail- 
ways, ferry-boats and taxi-cabs may be common carriers. 
An elevator in a public building run for the benefit of the 
tenants is a common carrier although the passenger pays 
nothing. 

Who is a passenger? A passenger is one who is right- 
fully in a public conveyance for transportation. A person 
who is traveling in the public conveyance is presumed to 
be rightfully there until the contrary is shown. 

In New York, Chicago and St. Louis R. R. Co. vs. Blumenthal, 
160 111. 40, the plaintiff was riding a freight train and was in charge 
of cattle which were being transported by him. He was injured by 
being caught between two cars while he was descending a ladder on 
one of the cars to look after his cattle while the train was stopping 
for water. It was held that the plaintiff was a passenger and that 
the rule of liability for injury to a passenger upon a freight train *is 
the same as applies where the train is devoted exclusively to pas- 
senger service. 

A person who has a ticket and is ready to get into the car- 
rier is a passenger even though he has not actually entered. 

Illinois Central R. R. Co. vs. Treat, 179 111. 576, is a case 
where Emma A. Treat purchased a ticket of the company with the 
intention of becoming a passenger on one of its trains and passed 



144 BAILMENTS 

through a turnstile provided by the company for that purpose and 
onto the depot platform. Held, that the relation of carrier and 
passenger existed when she passed through the turnstile, and that 
she was entitled to damages for an injury sustained upon the 
platform. 

Lake Street Elevated R. R. Co. vs. Burgess^ 200 111. 628, was an 
action for personal injuries received by a passenger who fell between 
the cars while attempting to board an elevated train in the city of 
Chicago. The plaintiff had paid her fare and was making a transfer 
on one of the elevated platforms during the night when she stepped 
off the platform and fell between the cars to the track below. Held, 
that the plaintiff was a passenger at the time of the accident and the 
company was bound to exercise the highest degree of care for her 
safety, consistent with the mode of conveyance adopted. 

A sleeping car porter is not a passenger. 

In Chicago J Rock Island and Pacific Ry. Co. vs. Hamler^ 215 111. 
525, the railroad company was held not liable for injuries to a porter 
in charge of a Pullman car, where the porter's contract of employ- 
ment with the PjiUman company recited that it released any railroad 
company hauling its cars from all liability for injuries to porters. 

If a person steals a ride he is not a passenger. A party 
traveling on a pass is generally regarded as a passenger, 
but not when he is riding on another^s pass. 

In Toledo, Wabash and Western Ry. Co. vs, Beggs, 85 111. 80, a 
party was riding on a free pass issued to a different person, and which 
was not transferable, passing himself as the person therein named. 
The car in which he was riding had a defective wheel which, giving 
way, caused the car to overturn. The company was held not hable 
for any injury to such a passenger, unless it was guilty of gross 
negligence amounting to a willful injury. 

In Chicago and Alton R. R. Co. vs. Michie, 83 111. 427, the 
engineer of the defendant railroad company allowed a party to ride 
in the cab of the engine. The engineer, according to the company's 
rules, had no right to take any one, except certain officers of the 



BAILMENTS 145 

company, into the cab of the engine, and the company was held not 
liable for the death of the party who was allowed to ride on the en- 
gine, which occurred when the train coUided with a freight train on 
the defendant's road. 

Carriers must receive passengers. The rule is that car- 
riers must carry any and all passengers without showing 
favors. All must be treated alike. This is true because the 
interest of the public must be considered. 

When the carrier is full it may refuse to carry more. 
Nor is it bound to stop or start at places not on its schedule. 
Nor is a common carrier of freight bound to carry passen- 
gers, nor is a passenger carrier bound to carry freight. 

Arnold vs, Illinois Central R. R. Co., 83 111. 273, was an action for 
personal injm-ies received by the plaintiff while he was riding as a 
passenger on the defendant's freight train. The plaintiff had been 
issued a ticket which recited that passengers on freight trains 
assumed all risks of accidents. Held, that the defendant, having 
passenger trains for the carrying of passengers and being imder no 
legaL obHgation to carry passengers on its freight trains, could 
contract on its own terms for the carrying of passengers who desired 
to ride on the freight trains, subject only to the quahfication that 
the same terms shall be impartially extended to all who may desire 
to avail themselves of them. The defendant was held liable only 
for gross negligence and the plaintiff, failing to allege such negligence, 
could not recover. 

A carrier is not legally bound to carry pickpockets, 
gamblers, other criminals or persons infected with con- 
tagious diseases. 

The carrier may make reasonable rules for the conduct of 
its passengers, but not all of its rules are binding. 

In Chicago and Northwestern R, R, Co, vs. WilliamSy 55 111. 
185, it was held that a railroad company may set apart a passenger 
coach for the exclusive use of ladies and of gentlemen accompanied 
by ladies. But in this case a colored woman was denied a seat in 



146 BAILMENTS 

such a car and she sued for damages. It was held that a rule of 
the company setting aside a *' ladies' car'' could not be held to ex- 
clude a colored woman from the use of the car where it does not 
appear that the company even set apart a car for the exclusive use 
of colored persons or provided separate seats for them. 

Tickets. The carrier may demand the fare in advance 
by requiring the purchase of a ticket. 

It is not unreasonable that the railroad companies should 
charge more for passengers who neglect to get tickets and 
consequently compel the conductor to collect the fares in 
the cars. 

In Chicago, Burlington and Quincy R. R. Co, vs. Parks, 18 111. 
460, it was held that a railroad company could charge an addi- 
tional fare to passengers who do not procure tickets before boarding 
the train. Parks got on the train at Aurora to go to Batavia. He 
got on without a ticket and the conductor charged him an extra 
fare of five cents. When the train got to Batavia it was raining and 
Parks got back on the train to go to the next stopping place, known 
as the Junction. The conductor in collecting the fare to the Junction 
charged Parks another five cents extra for not having his ticket. 
Parks objected and the conductor told him he would have to get 
off or pay his fare. Parks said he would get off under protest. The 
conductor stopped the train and Parks got off at some point between 
the stations. He brought suit against the company for putting him 
off the train. Held, that Parks should have paid the extra five cents 
but under the railroad incorporation law the train should have 
stopped at the next usual stopping place before putting off a pas- 
senger who refused to pay his fare, and the company was held 
technically liable for not doing so even though Parks would thereby 
have reached his destination without paying the full fare which the 
company was authorized to charge. 

But the passenger must be given an opportunity to buy 
his ticket or the company cannot charge any extra fare. 

In Illinois Central R, R. Co, vs, Johnson, 67 111. 312, a passenger 
took an early morning train from Champaign to Rantoul. He 
could not get a ticket because the agent had not opened the office 



BAILMENTS 147 

by the time the train left and he offered the conductor the regular 
fare in money, which the conductor refused to receive. The passenger 
was put off the train and had to walk back to the station. He re- 
covered $200 damages from the railroad company. 

But in St. Louis, Alton & Terre Haute R. R. Co. vs. South, 43 
III. 176, a passenger endeavored to purchase a ticket at a country 
station about five minutes after time for the train to pull out. The 
ticket office was closed because it was the custom of the agent to 
keep it open only until time for the train to leave. The train was 
five minutes late but it was held that that was no reason why the 
passenger should not have been on time so as to purchase his ticket, 
and the company was aiithorized to charge him the customary 
additional fare for not having a ticket. 

If the passenger has lost his ticket he usually must buy 
another. But if he can prove he lost his ticket he need not 
get another, since the carrier has already received the con- 
sideration. 

In Pullman Palace Car Co. vs. Reed, 75 111. 125, a passenger pur- 
chased a ticket for a berth in a Pullman car. After he had boarded 
the car but before the train left the station the Pullman conductor 
asked him for his ticket but he was unable to find it. He proved by 
the station agent and by the Pullman porter that he had had the 
ticket but the conductor insisted that his orders were either to take a 
ticket or the money for the berth. After an argument during which 
time the train left the station the conductor compelled the passenger 
to give up his berth and take a seat in the day coach. The next 
morning the conductor found the ticket on the floor of the Pullman 
car and gave it to the passenger, saying that he could get his money 
back if he would turn it in to the agent. The passenger said he would 
not sell so cheaply and afterwards sued the Pullman company and 
recovered a judgment in the trial court for $3,000. The Supreme 
Court held the amount was grossly excessive; but that the passenger 
was entitled to recover the price of his ticket and a reasonable 
compensation for the trouble he suffered by being deprived of his 
berth in the sleeping car. 

Liability. Carriers of passengers are held to a very high 
standard of liability. 



148 ' BAILMENTS 

The liability begins when the passenger has his ticket and 
is ready to take the train at the station or usual stopping 
place. (See cases cited on pp. 143 and 144.) When the 
passenger has alighted from the vehicle and has left the 
station the liability of the company is ended. 

In West Chicago Street R. R. Co. vs. Walsh, 78 111. App. 595, 
Mary Walsh rode on an electric car as a passenger. Just after 
alighting, a horse standing near, belonging to the company, kicked 
her. Held, that when the car stopped in a safe place, the relation 
of the company to her as a common carrier ceased and she could no 
longer be regarded as a passenger. 

When a common carrier of passengers undertakes to 
carry a passenger it must protect him. 

In Kane vs. Cicero Proviso Electric Ry. Co., 100 111. App. 181, 
Kane got on the rear platform of a car. It started suddenly and he 
lost his footing. Another car on a parallel track struck and injured 
him. Held, that the relation of passenger and carrier existed and 
that the company owed him the highest degree of care consistent 
with the mode of conveyance used. 

In Chicago and Alton R. R. Co. vs. Pillshury, 123 111. 9, the 
plaintiff, while riding on the defendant's train, was wounded with 
a pistol shot fired by some one of a mob of strikers which was 
attacking other laborers who were passengers on the train. The 
train had stopped at a point between stations and had taken on a 
number of laborers whom the strikers were after, and it was held 
that the railroad company was negligent in its duty of exercising 
due care for the safety of its regular passengers when it took on said 
laborers in the same car with its regular passengers, knowing that 
the strikers were apt to make an attack on the car. 

In Pittsburg, Cincinnati and St. Louis Ry, Co. vs. Thompson, 
56 111. 138, the plaintiff sustained personal injuries when a car in 
which he was a passenger on the defendant's road overturned 
either because of a defective roadbed or the breaking of an axle. 
Held, that a railroad company must guard against injury to pas- 
sengers by doing all that human care, vigilance and foresight can 



BAILMENTS 149 

reasonably do, consistent with the mode of conveyance and the 
practical operation of the road. The company is not required to 
incur a degree of expense which will render the operation of the 
road impracticable. In this case it was held that when the plaintiff 
proved that the injury was caused by the overturning of the car 
in which he was a passenger, he made out a case of neghgence 
against the company. The burden was then on the company to 
prove that the accident resulted from a cause for which they should 
not be held responsible. The plaintiff recovered $5,000 damages. 

In Springer vs, Schultz, 205 111. 144, the defendant owned a 
six-story building on Canal street in the city of Chicago. The 
plaintiff was working for one of the tenants who had an office on 
the sixth floor and while he was riding down the elevator used by 
the tenants the car became disconnected from the cable supporting it 
and dropped six stories, to the basement. He recovered a judgment 
for $15,000 damages for serious injuries on the head and back, which 
resulted in more or less permanent injury to his spine, brain and eyes. 

While the common carriers must protect their passen- 
gers, yet the fault of the passenger himself may excuse 
them. To illustrate, in an extraordinary case {Zimman 
vs. Miller Hotel Co,, 95 Neb. 809), the court held that the 
common carrier is not hable when a passenger attempts 
to get on an elevator that is moving at nearly full speed 
past the floor at which he was standing. 

BAGGAGE 

Defined. By '^ baggage ^' is meant such articles as trav- 
elers may reasonably be expected to carry on their journeys. 

Trunks, grips and suitcases are baggage. A set of tools 
carried by a carpenter has been held to be baggage, as 
have books used by a student and surgical instruments of 
a surgeon. A watch and jewelry for the traveler's personal 
use are baggage, but jewelry for trade or commerce is not 
baggage. 



150 BAILMENTS 

In Michigan Central R. R. Co. vs. Carrow, 73 111. 348, a passenger 
on a railroad checked his trunk as baggage. The trunk contained 
very valuable articles of merchandise, the stock of a retail jewelry 
store and worth about $30,000. It was consumed by fire while in 
the defendant's baggage car. Held, that the railroad company was 
not liable as a common carrier of merchandise. Baggage checked by 
a passenger on a railroad should contain only the ordinary articles 
needed by the passenger on his trip or goods for his personal use, and 
if the company is not notified of the contents of the trunk which con- 
tains valuable merchandise, it will be liable only for gross negligence 
as a gratuitous bailee. 

In Woods vs. Devin, 13 111. 746, the plaintiff put his carpetbag 
on board a steamboat going from Peoria to LaSalle and the bag was 
stolen before the boat left Peoria. Held, the steamboat owner was 
liable for the bag and its contents, including a pocket pistol and a 
pair of duelling pistols. (This was in 1852.) 

Carrier must transport baggage. Unless there is a con- 
trary agreement the carrier must transport the passenger's 
baggage. 

And in the case of a railroad it must be carried on the 
same train as the passenger or the carrier is liable. 

This was decided in the case of Wold vs. P. C. C. & St. L. 
R. R. Co., 162 111. 545 (cited on p. 135), when the railroad 
company was held liable for the loss of a trunk in a flood. 
The train which was wrecked by the flood carried the 
baggage but was not carrying the passenger. 

Liability of carrier. The carrier is liable almost as an 
insurer of baggage after it has been delivered and accepted. 
This point is illustrated in Woods vs. Devin, 13 111. 746, 
where the carrier was held responsible as soon as the 
carpetbag was placed upon the boat. 

The liability as a common carrier ceases after the pas- 
senger has had a reasonable time to carry the baggage away. 
What a reasonable time is depends upon all the facts in 
each particular case. 



BAILMENTS 151 

If it is not called for within a reasonable time the carrier 
must store it in a secure warehouse. 

A common carrier stored baggage in a station that was 
not protected against entrance of burglars, and baggage 
was stolen. The company was liable, as a warehouseman. 

It is often of great importance to know whether a com- 
pany is liable as a common carrier or a warehouseman, 
since the former is liable for exceptional care and the latter 
for only ordir^ary care. 

In Chicago^ Rock Island and Pacific R. R. Co. vs. Boyce, 73 111. 
510, a passenger from San Francisco to Chicago became sick en route 
and obtained a lay-over ticket at a station in Iowa. His baggage 
went on to Chicago and remained in the railroad company's ware- 
house, which was destroyed by the great fire of 1871. Held, that the 
company was not liable as a carrier after the baggage was delivered 
to the warehouse, and that the responsibility of a warehouseman was 
not sufficient to render it liable for the loss which occurred without 
the fault of the company. 



QUESTIONS ON BAILMENTS 

1. Define bailment. 

2. Ross delivered Bower a watch to be redelivered when $2.5 

was paid, Ross having borrowed that sum on it. Is this a 
bailment? 

3. Name the three general classes of bailments. 

4. What does gratuitous mean? 

5. Who is a gratuitous bailee? 

6. Chase was paid to keep another student's books in his locker 

for him. What kind of bailment is this? 

7. Suppose he was paid to repair the binding on the books. What 

kind of bailment would it be? 

8. If he was paid to carry the books home what kind of a bailment 

would there be? 

9. What is a pawn? 

10. In what way does a pawn differ from a chattel mortgage? 

11. What is the rule as to using a pawn? 



152 BAILMENTS 

12. Finley delivered some surgical instruments to Corbin for 

repair. Corbin refused to redeliver them until he was paid. 
Had he a right to hold them for payment? 

13. Suppose he gave them to Finley who then refused to pay. 

Could he compel Finley to give them back for him to hold 
until he was paid? 

14. Define lien. 

15. Higgins refused to redeliver a brace of duelling pistols loaned 

him by Dutton. How could Button recover them? 

16. Ewing let Coleman have his team of horses for one month free 

of charge. Coleman agreed to feed and care for them. What 
determines whether this is a gratuitous or mutual benefit 
bailment? 

17. What care is required in bailments for the bailor's sole benefit? 

18. In ordinary bailments for mutual benefit? 

19. In bailments for the bailee's sole benefit? 

20. What three bailees have the greatest responsibility? 

21. Sperry bought an excursion ticket for a boat trip. The ticket 

stated, ''in consideration of the reduced fare the holder of 
this ticket releases the company from all liability." Through 
negligence of the Captain the ship sunk. Could Sperry 's 
heirs recover damages for his death? 

22. Define ordinary care. 

23. Kimball left a piano at Simmons' house. Simmons left a window 

open one night and rain damaged it. Kimball paid him $5 
to have it stored. Is Simmons liable? Give reason. 

24. Rice rented Oilman his automobile for three months. While 

Oilman was driving at a rate of forty miles an hour the car 
was wrecked. Must he pay the damage? Oive reason. 

25. Suppose he was driving carefully at the rate of twenty miles 

an hour. Would he be Hable? Oive reason. 

26. Homuth loaned his horse to Cavender, telling him it need not 

be tied. Cavender did not tie the animal and it ran away 
and was injured. Is he hable? Oive reason. 

27. Bunnell borrowed some draperies to be used in a show. He left 

them at the playhouse several weeks after he was through 
with them. They were in a supposed safe place but someone 
stole them. Is Bunnell liable? Oive reason. 

28. Name the three exceptional classes of bailments for mutual 

benefit. 

29. Why are innkeepers treated under bailments? 



BAILMENTS 153 

30. Give the facts and the law in the case of Sheffer vs. Willoughby. 

31. How does an innkeeper differ from a boarding house keeper? 

32. Who is a guest? 

33. CoUins went to Casner's hotel to visit a friend. When there 

he was robbed of a watch and $12. ColHns sought to hold 
Casner for the loss. Is the latter liable? Give reason. 

34. Suppose Collins expected to buy his dinner there but had not 

actually gone into the dining room. Would he be a guest? 

35. IngersoU went to a hotel and asked for a room. Having no 

baggage he was asked to pay in advance. Had the hotel the 
right to demand this? 

36. Black goes into a hotel and offers to pay for his breakfast. 

The hotel keeper, Wiley, refuses because Black is dishonest 
and Wiley doesn't want him there. Is Wiley liable in damages 
if he does not furnish the meal? 

37. Crane gave the hotel porter a suit case which he had borrowed 

that was filled with his personal belongings. Through the 
fault of another porter employed at the hotel it was lost. 
Is the hotel liable for the suit case since it didn't belong to 
Crane? How about the personal belongings? 

38. What is the general rule as to the Hability of an innkeeper? 

39. What losses is the innkeeper exempted from paying? 

40. In what way was the sleeping car company's liability com- 

pared to the common carrier's in the Nevin vs. Pullman Palace 
Car Co. case? 

41. What is the rule as to what goods a common carrier must 

carry? 

42. Wells was in the business of hauling goods weighing not more 

than 400 pounds. Gardner was unable to secure any one else 
to haul an iron safe that weighed 401 lbs. and insisted that 
Wells haul it as it was ^'practically 400 pounds." Wells 
refused. Is he liable in damages if there was no one else in 
the city to haul it? 

43. A'street car company had rules that provided that only sixty 

persons were allowed to ride on its cars at a time. Patterson 
who had to walk three miles home if he failed to ''catch" 
one of their cars was refused a ride because the car held sixty 
passengers in it. He sued the company. Is it liable in 
damages? Give reason. 

44. There are five exceptions to the rule that a common carrier is 

liable as an insurer of goods it carries. Name them. 



154 BAILMENTS 

45. The worst storm in the State of Illinois in forty years swept 

a railroad bridge away and a train was wrecked. Engineeis 
had said it would withstand any storm. Is the railroad 
company liable? Give reason. 

46. While driving his automobile during a storm, to deliver some 

goods, Green, a common carrier, driving carelessly, skidded 
into a ditch, damaging the goods. Is he liable for the loss? 

47. Who is a public enemy? 

48. Allen delivered a package to the express company for ship- 

ment. It was wrapped in a wrapper that had been used for 
books. The company thought it contained books but it con- 
tained a delicate instrument which was damaged. Is the 
company liable? Give reason. 

49. A common carrier was forced by a sheriff to give up goods. 

He later returned them, but they were damaged. Is the com- 
pany liable? 

50. Young trees were shipped by express. The coldest weather in 

years killed them. The company had no way of being in- 
formed of the change in the weather. Is the company liable? 

5 1 . Melons that were ripe were shipped from Kentucky to Northern 

Illinois. There was no delay in the shipment but the melons 
were spoiled. Is the company liable? 

52. A railroad was engaged in moving a circus. Several wild 

animals, not accustomed to this climate, died because of the 
excessive heat. They died in the box cars. Is the railroad 
liable? 

53. Fruit was sent in August from Wisconsin to Kentucky in 

refrigerator cars. The railroad company neglected to put 
ice in the cars and the fruit spoiled. Is the company liable? 

54. Webb left goods at the freight depot for shipment. Nothing 

was said about liability. He was given a receipt which 
recited, that '4n case of loss by fire this company is not 
liable." Webb's goods were destroyed by fire caused by 
sparks from the engine. Is the company liable? 

55. Anderson wanted to ship a six-months-old cub lion mascot from 

Peoria to Springfield. The express company at first refused. 
Later it agreed if Anderson would assume any and all risks 
and release the company from any and all liability. He 
agreed. Company agents arranged a fight between the cub 
and a dog and the cub was injured. Could Anderson recover 
damages? 



BAILMENTS 155 

56. Name two common carriers that do not have to make personal 

deHvery but only need to notify the parties that goods are 
to be called for. 

57. A river boat unloaded its freight at Quincy. Among the freight 

were goods for ^'G. A. Brady." Notice of these goods being 
there was published in the Quincy Herald but was not read 
by Brady, and the goods were not called for. They were dam- 
aged in storage. Is the company liable? 

58. Suppose Brady had read the notice and had neglected to call 

for the goods. Would the boat company have been liable as 
a common carrier or a warehouseman? 

59. Of what importance is it to know whether a company is liable 

as a common carrier or a warehouseman? 

60. Goods are sent by express to '' I. D. Washington, Peoria, Illinois." 

There are two I. D. Washingtons there and the express com- 
pany delivered to the wrong one. Is the company liable? 

61. George Wallace of El Paso received a telegram from '^ your son, 

H. C. Wallace, Galva, Illinois asking for money." George 
Wallace had a son in Galva and sent the money by express 
money order. It was discovered later that a stranger had 
sent the telegram and secured the money. Could George 
Wallace recover from the express company because it did not 
deliver the money to his son? 

62. William Harlan put an advertisement in a local paper stating, 

^^ William Harlan will carry passengers from St. Francisville 
to Mt. Carmel, for two dollars. Call him." Does this ad- 
vertisement constitute him a common carrier? 

63. What two things are necessary to constitute one a common carrier? 

64. Who is a passenger? 

65. Bacon stole a ride on a freight train. While riding on it the 

train was wrecked and he was injured. Could he collect 
damages? Give reason. 

66. During a storm the engineer on a fast train was unable to see 

a safety block and the train was wrecked. Welch was injured. 
Could he recover from the company if the engineer was not to 
blame? Give reason. 

67. A railroad company issued passes to the two ^'sons of Gen. 

Mgr. Johnson." One of the sons gave the pass to Allen and 
Jackson who rode from Galesburg to Pekin. Jackson was 
injured as he got off the train because the last step broke. 
Is the company liable? 



156 BAILMENTS 

68. What is baggage? 

69. Robinson carried a suit case full of presents with him on a 

train. The presents were for his friends. They were lost 
or stolen. Is the company liable? Give reason. 

70. Marsh carried some pictures with him on a boat. They were for 

his home. Are they baggage? 

71. Suppose in the above question he was carrying money he ac- 

tually needed on his journey. Is the money baggage? 

72. What is the liability of the common carrier for baggage? 

73. When does the liability commence? 

74. What case shows when it ends? 



CHAPTER VII 

NEGOTIABLE INSTRUMENTS 

Defined and explained. A negotiable instrument is a 
written instrument that can pass from one party to 
another by indorsement and delivery or by delivery 
alone so as to give the third party at least as good — 
and sometimes a better — ^title than the original party 
had. 

(The law on this subject in Illinois is covered by the 
Uniform Negotiable Instrument Act adopted in 1907.) 

The word negotiable means transferable — that which 
may be assigned so that the person who receives it may 
enforce payment in his own name. Most contracts are 
not assignable — that is, they can not be transferred from 
one party to another and be valid in the hands of one 
not a party to the contract. In general all negotiable 
instrument contracts are valid in the hands of one not a 
party to the contract. 

In many cases negotiable instruments pass from one 
party to another as money does. Checks, drafts and 
promissory notes are very common, and if the party 
signing is known to be reliable, they pass without 
question. 

Dehvery is absolutely necessary to pass title. Indorse- 
ment is not always necessary. 

In Garvin vs. Wiswell, 83 111. 215, the court held that a negotiable 
instrument payable '* to bearer" may be negotiated by delivery with- 
out indorsement. But if it is payable to a person named ^^or bearer," 
it must be indorsed. 

157 



158 NEGOTIABLE INSTRUMENTS 

A note signed as a joke is not valid in the hands of 
those who know no contract was intended but is vahd in 
the hands of an innocent third party who takes it for fair 
value. This illustrates the statement that a third party 
receives as good, if not a better, title than the original 
parties. 

Shipley vs. Carroll, 45 111. 285, was a case in which Elizabeth Car- 
roll as a joke wrote and signed a promissory note in the presence of 
Foley. Foley sold it to an innocent third party. The court held the 
third party could recover from Elizabeth Carroll, although it was of 
no value in Foley's hands. 

While the rule is that a thief can pass no title, an excep- 
tion is made in negotiable instruments. 

Jones vs. Nellis, 41 111. 483, was a suit to recover the value of a 
$500 negotiable instrument, that had been stolen. Nellis bought it 
in good faith and for fair value. The court held Nellis had acquired 
the title. The court held that this rule was necessary to prevent 
confidence in negotiable paper from being undermined and indirectly 
seriously impairing commerce. So the buyer got a better title than 
the seller himself had. 

The essentials. The essentials of a negotiable instru- 
ment are : 

1. An unconditional written promise or order, 

2. Signed, 

3. Negotiable in form, 

4. To pay a certain amount, 

5. Absolutely, 

6. At a certain time, 

7. To the order of a certain party or bearer. 

An unconditional written promise or order. While no 
particular words are necessary to make an instrument 



NEGOTIABLE INSTRUMENTS 159 

negotiable, yet it is necessary that there be an uncondi- 
tional promise or order. 

Gillilan vs. Myers , 31 111. 525, was a suit brought on this instru- 
ment: 

^^Mr. Myers: Sir — You will please take up my note payable to 
Samuel Smith, for two hundred and two dollars, with ten per cent 
interest from the first of April, and it will be right as we talked. 

John Gillilan." 

The court held the instrument was not negotiable as a bill of 
exchange as the writing is a mere request and since Smith might 
never present the note, it might never be payable. 

Signed. The instrument must be signed. It may be 
signed in pencil or in ink. A party may sign by his mark, 
or he may use figures instead of his name. (See Weston 
vs. Myers, 33 111. 424, cited on p. 168.) 

An agent should be very careful how he signs his name, 
lest he bind himself instead of his principal. He will not 
exempt himself by signing his name and adding the word, 
''agent, '^ since that merely identifies the agent. (See 
Agency, p. 91.) 

Negotiable in form. It is necessary to have the instru- 
ment negotiable in form. The statute says the instrument 
''must be payable to the order of a specified person or to 
bearer.^' 

To pay a certain amount. That the instrument be valid 
the amount to be paid must be certain. The holder of the 
note must know the amount of money to be paid. 

It is often written on notes that attorneys are to be 
allowed ten per cent for collecting the note if it is not paid 
when due. Our courts have held that this provision does 
not make the notes invalid. 

Nor is it invalid because it may be paid sooner than 
required. 



160 NEGOTIABLE INSTRUMENTS 

In Beatty vs. Western College, 177 111. 280, it was held that a 
note payable on or before a certain day, which provided that it 
should become due in case the maker died before the note matured, 
is vahd. 

Absolutely. The payment must be absolute. There 
must be no question about the obligation to pay. Neither 
can there be any alternative. 

Husband vs. Epling, 81 111. 172, involved an instrument in 
writing which admitted that $1800 was due, ^' which amount is 
to be paid over when the estate of the said Thomas Mason is 
settled up." 

The court held that it is essential that the event upon which a 
note is to become payable must be certain. There must be no 
alternative. While the law requires estates to be settled yet the court 
cannot state that the law will be obeyed. The estate may never be 
settled, therefore payment is not absolute, therefore there is no 
negotiable instrument. 

At a certain time. The time when the instrument is to 
be paid must be certain. If the note provides payment is 
to be made at the death of one of the parties it is valid 
(see Beatty's Estate vs. Western College, 177 111. 280), 
because the party is certain to die. 

But a note due if a certain event occurs is not valid if 
there is a question as to whether or not it will occur. 

Kelley vs. Hemmingwayj 13 111. 604, was a suit on the 
following paper : 

''Castleton, April 27, 1844. 

Due Henry D. Kelley, fifty-three dollars when he is twenty-one 
years old, with interest. David Kelley. '^ 

The court held that there was no certainty that Henry D. Kelley 
would ever become twenty-one. He did become twenty-one but 
even then the court held it not negotiable because of the uncertainty 
existing when the instrument was made. 



NEGOTIABLE INSTRUMENTS 161 

If no time is specified it becomes due when payment is 
demanded and refused. 

When negotiable paper is due on a hohday the party 
may pay it the next day. 

In Balkwill vs. Bridgewood Wood Finishing Co., 62 111. App. 663, 
Balkwill & Company sent a check on a Chicago bank to the Bridge- 
wood Wood Finishing Company. Several other checks had on former 
occasions been so sent by them. It was understood that it took 
several days for the check to reach the company at their office 
at New Milford, Connecticut. It was deposited in a New Milford 
bank on May 29th, too late for forwarding. The 30th being a 
legal hohday, it was not forwarded until May 31st. It was presented 
to the Chicago bank on which it was drawn on June 3rd and pay- 
ment was refused, as the bank had suspended payment on June 2nd. 
Held, that the delay caused by the holiday was not the fault of the 
Bridgewood Wood Finishing Company. 

Before communication and travel became rapid it was 
customary to allow the holder of an instrument a few days' 
time after maturity before paying the debt. It finally 
became the law that he be allowed three or five days of 
grace. In Illinois, as in most states, this is abolished. 

The Statute of Illinois provides that a negotiable in- 
strument is not void if ante-dated or post-dated unless the 
act is done for an illegal purpose. 

To order of a certain party or bearer. The instrument 
to be negotiable must be payable to the order of a certain 
party or order or to bearer. 

Weeger vs. Mueller, 102 111. App. 259, was a suit on a written 
instrument. The instrument was merely a statement showing 
money due. It was indorsed: 

^' 1 promise and order to pay the above amount in full 

Magdalena Mueller." 

The court held that it was not a negotiable instrument since 
the instrument was not made payable to bearer or some person 
therein named. 



162 NEGOTIABLE INSTRUMENTS 

But that is certain which can be rendered certain (see 
p. 37), so if no party is named but is referred to so he can 
be identified, it is sufficient. 

Adams vs. King, 16 111. 169, was upon a promissory note payable 
to '^administrators of Abner Chase, deceased." It was claimed that 
''that is certain, which may be rendered certain, '^ and the cornet 
upheld this view that the persons are specified sufficiently since the 
"administrators of Abner Chase, deceased, '* can be identified. 

Kinds of negotiable instruments. Negotiable instru- 
ments are classed as : 

1. Bills of exchange, 

2. Checks, 

3. Promissory notes. 

BILLS OF EXCHANGE 

Defined. A bill of exchange (which is the same thing as 
a ^^ draff) is a written order from one party to another, 
directing the latter to pay a third party a certain amount 
of money. 

Kinds. Bills of exchange are of two kinds: 

1. Foreign, 

2. Inland. 

A foreign bill of exchange is one drawn in one State or 
Country and payable in another State or Country. 

In Mason vs. Dousay, 35 111. 424, a bill drawn in Michigan and 
payable to a certain party in Illinois was held to be a foreign bill. 

An inland bill of exchange is one drawn and payable in 
the same State or Country. 

There are several forms in use. An example of one of 
the most common kinds is given below: 



NEGOTIABLE INSTRUMENTS 103 




At sight 



The First National Bank 

OF BLOOMINGTON, ILLINOIS 
Sibc hnadred and thirty » 

WITH EXCHANGE AND COLLECTION CHARGES 
VALUE RECEIVED AND CHARGE TO ACCOUNT OF 



Tn Htmter Rodgers 



Lagalla 



Illlnol8> 



Parker Dooley is the drawer, the First National Bank 
is the payee, and Hunter Rodgers is the drawee. 

When the drawer and drawee both are banks, the bill of 
exchange is known as a bank draft. 




ST Natioi^al. Bajvk: xo.^3AS.iin 

70-I03 

oiyfiNGXOTsr, Illinois 



JAN 251922 



Pay TO THE ORDER OF_ 

itACJvt 9^un HunoREDTwenrr a$M dollars TtHttrr gtsHT cgMTs 



^. ^0.,^ ^ ifTrC ' — 



To First National. Bank, 
2-1 Chicago,' III. 



In this transaction Will Jarman (whose name does not 
appear on the bill) wished to pay Linder S. Wood of Mt. 
Carmel, Illinois, $426.38, so he went to the First National 
Bank of Bloomington and bought the above draft on the 
First National Bank. 

This will be readily accepted by any bank and then go 
through the Chicago clearing house. 

Acceptance. Legally the drawee may or may not, as he 
chooses, accept the bill of exchange. Should he accept it, 
he is known as the acceptor. The statute provides that 
the acceptance must be in writing. 



164 



NEGOTIABLE INSTRUMENTS 



If the bill is accepted the acceptor is liable and must 
pay it. 

In Nelson vs. First NaCl Bank of Chicago, 48 111. 36, it was held 
that their promise to accept was binding on the drawee. The 
bank promised that it would accept checks which the drawer might 
draw to pay for a cargo of corn. This promise was communicated 
to the owner of the corn and on the faith of the bank's promise the 
owner sold the corn and took the checks in payment. The bank was 
held liable to pay the checks. (This case was decided before the 
statute was passed requiring the acceptance to be in writing.) 

If he refuses to pay it — ^that is, dishonors it — ^the drawer 
is liable, but notice of the nonpayment must be given him. 

Walker vs, Rogers, 40 111. 278, was action by the indorsee (or 
holder) of a bill of exchange to collect it from the drawers, the 
acceptor having failed to pay. The indorsee failed to notify the 
drawers of the nonpayment and it was held that such omission 
discharged the drawers. 

CHECKS 

Defined and explained, A check is an order drawn on a 
bank directing the bank to pay money to a third person 
or order on demand. Below is shown a typical check: 



ST National Bank 

70-103 
. Ill. ^S^Hi:/-' >^ 192Z_ No. / >^ 




-^iJLk 



/ ^^cZk-^ "^ " ^CH} 



-Dollars 



^cK..-<->^ ^^?^:gu/<^ . 



Paul Staley is the drawer, the First National Bank is the 
drawee and George F, Lester is the payee. 



NEGOTIABLE INSTRUMENTS 



165 



The bank must pay the check if there are funds in the 
bank that belong to the drawer, but if there are no funds 
the bank need not honor the check. 

In Decatur National Bank vs. Murphy ^ 9 111. App. 112, a firm 
had $575.27 on deposit in the bank. A check of $600 was presented 
against this account. The bank asked the firm to make up the 
difference to meet the check, but it failed to do it. It was held that 
the bank was not bound to pay the check, as it exceeded the fund 
in the bank against which it was drawn. 

In case there are no funds belonging to the drawer, then 
the drawer is liable. Usually the drawer of a check is en- 
titled to notice of dishonor, but oftentimes there is legal 
excuse for failing to give it. 

Should the drawer write the check knowing there are no 
funds he is liable criminally. 

The check must be presented for payment within a 
reasonable time. 

In Brown vs, SchintZy 98 111. App. 452, the court held that a 
reasonable time in which a check must be presented and payment 
demanded of the drawee bank is until the close of the banking 
hours of the next day after the check is accepted. 

Certified checks. A check is said to be ^' certified '' when 
the word '^certified^^ or some expression of acceptance is 
written across it by the bank. The bank then sets aside 
the depositor's funds for the amount of the check. 




To First National Bank, 

Ttwios BLOOMINGTON, ILL. 



^^r, /f:' /Si^s^^e^ty^ 



166 NEGOTIABLE INSTRUMENTS 

When the holder of a check has it certified, the 
drawer and all indorsers are discharged from liability. 

PROMISSORY NOTES 

Defined and explained. A promissory note is a writ- 
ten promise to pay a certain party or order or to the 
order of a certain party or bearer, a certain amount 
absolutely. 

If it is not to pay a certain person, or to bearer, it is not 
a promissory note. 

Mayo vs, Chenoweth, Breese, 1 III. 200, was an action on the 
following written instrument: 

^^This shall oblige me to pay $35 on a judgment in the hands 
of Lewis Murphy, Esq., against Mark A. Sanders, in favor of John 
Chenoweth, with interest from this date till paid. 

Jonathan Mayo." 

Held, that the instrument does not show to whom it is to be paid 
and for that reason no action could be had upon it. 

Neither is an instrument a promissory note that is 
payable in the alternative, as, if it is payable to one of 
two parties. 

Musselman vs. Oakes, 19 III. 81, was a suit on a promissory note 
payable to Glive Fletcher or R. H. Oakes, administrators. The 
court held that an instrument payable in the alternative to one or 
more persons is not a promissory note, since a promissory note must 
be payable to one certain person. No one knows whether Fletcher or 
Oakes had the right to the money. 

A common example of a promissory note is given at 
the top of the following page: 



NEGOTIABLE INSTRUMENTS 



167 



^«^^^ 



BLOOMINGTON. ILL._ 



// 



Anf— 



$ ^Cf0 



..months after date, we or either of us promise to pay to the order of 







A 



y^l 



. DOLLARS, 



for value received, with interest at six per cent per annum from date if not paid within ten days after maturity at tht 

First National Bank of Bloomington 



A^o._ 



Frank Miller is the maker and Archie Schaeffer is the 
payee. 

If Schaeffer wishes to secure the money before October 
11th he may indorse the note on the back — that is, he 
may sign it — and transfer the title. Should he transfer 
it to Tom Freed, then Freed will be known as the 
"holder'' or "indorsee'' and Schaeffer is known as the 
"indorser." 

Another form of note that is common is known as a 
"judgment note." Below is a specimen note of this kind: 



BLOOMINGTON. ILL ^^^»^-<^m*.^6V /<^- /^^/ 






First National Bank of Bloomingtoi 

At its Banking House in the City of Bloomington 




Due - ^L^ 



.A-l92:kL 



^/a>^x:^ ^ 



J. S. Wyatt is the maker and First National Bank is the 
payee. 



168 NEGOTIABLE INSTRUMENTS 

NEGOTIATION 

Indorsement. Indorsement is the act of signing one^s 
name on the negotiable instrument. 

In Herring vs. Woodhullj 29 111. 92, it was held that an indorse- 
ment on the face of a note is a sufficient indorsement to transfer the 
note. But it is customary to write on the back, which the words, 
*Hn dorsBy^ literally mean. 

Negotiable instruments may be indorsed by an agent 
and constitute a valid transfer. 

In Slaughter vs. Fay, 80 III. App. 105, the court held that an in- 
dorsement by an agent is the act of the principal, ^' as fully as though 
he had personally performed the physical act of writing his name 
upon the back of the checks." 

No particular form or words are necessary to transfer 
the paper if the intention is clear. 

Weston vs. Myers, 33 111. 424, was an action on papers upon 
which were written: 

"Good for 50 cents, 

H. C. Myers, Sut.," and indorsed, '^H. C. M." 

The court said, it makes no difference so far as the defendant's 
liability is concerned ^'whether he wrote his name in script, or 
Roman letters, or whether such letters were made with a pen or 
with type, or whether they be printed, engraved, photographed or 
lithographed, so long as he adopted and issued the signature as his 
own." The court called attention to a case in which the figmes 
*^ 1, 2 and 8," written as a substitute for a name, were held vaHd as a 
signature, and another case in which a party signed his initials, 
''P. W. S.," and this was held to be a valid signature, so in this case 
the initials, '*H. C. M.'' were held to be a vahd indorsement. 

An indorsement by a payee or indorsee should be written 
as the name appears on the paper and if it is misspelled the 
proper signature may be added to the indorsement. 



NEGOTIABLE INSTRUMENTS 169 

But a forged indorsement, in the eyes of the law, is no 
indorsement, since it does not express the intention of the 
party whose name is signed. 

Commercial National Bank vs, Waggemxin, 87 111. App. 171, 
was a case in which Mrs. Harre's name was forged to a note. The 
court held that no title passed and the note was her property. 

Kinds of indorsements. There are five kinds of indorse- 
ments used with negotiable instruments. They are: 

1. In blank, 

2. Restrictive, 

3. Conditional, 

4. Qualified, 

5. Special. 

1. The indorsement in blank is merely signed by the 
indorser on the back of the check or note, usually at either 
end of the paper. 

I Arthur Moran I 

2. The restrictive indorsement is one which limits the 
negotiation of the instrument. 



Pay to 

Herbert Stookey, in trust 
for my use only, 
Russell Shearer 

3. The conditional indorsement makes payment condi- 
tional upon some certain event. 



Pay to the order of 
Francis LaTeer 
provided he has 
reached the age of 
twenty-one 
Roy Cheney 



170 NEGOTIABLE INSTRUMENTS 

4. When the indorser wants to greatly Kmit his Kability 
he can quaUfy his indorsement by the words, 'Svithout 
recourse/' 



Pay to Ralph Purdum 
or order, without 
recourse to me 
WilHam Curtis 

It is often stated that the indorser cannot be compelled to 
pay under any circumstances when he qualifies his indorse- 
ment this way, but this is not true, although he limits his lia- 
bility so that in most cases he is relieved of all responsibility. 

Drennan vs. Bunn, 124 111. 175, was a case in which Bunn trans- 
ferred two notes ''without recourse.'^ Drennan, the holder of the 
notes, lost the interest on the notes because it was higher than the 
law allowed. He sued Bunn. The court held that he could recover 
from Bunn even though the latter signed ''without recourse," since 
the notes were not what they appeared to be on their face. 

5. A special indorsement is an order to pay the money to 
a particular person. 



Pay to Holhs O. Frey 
or order 
Walter Brown 

When notes are joint and several. Notes signed by two 
or more parties are joint and several. The makers can be 
sued jointly or separately. 

CONTRACTS OF THE DIFFERENT PARTIES 

The contract of the maker. The maker is bound to pay 
the note according to its conditions. No demand for pa}^- 
ment need be given on a note payable on demand. 



NEGOTIABLE INSTRUMENTS 171 

The contract of the drawer. The drawer impliedly 
agrees that on presentment the instrument will be accepted 
or paid, and if dishonored and protested (if a foreign 
bill), he will pay. 

In Wood vs. Surrells, 89 III. 107, a bill of exchange was properly 
presented and accepted and was on the dsij of maturity presented 
for pa^'^ment. Payment was refused and notice was, on the same 
day, duly given to the drawer. Held, that the liability of the drawer 
thus became fixed and complete. 

He is supposed to have some funds to draw upon. 
Should he draw without having any reasonable ground to 
believe the bill would be honored he is liable without notice 
of dishonor. 

In Wood vs. Price, 46 111. 435, John and Joshua Wood, doing a 
banking business, drew three drafts on a Chicago bank. It was held 
that the drawers were liable without notice of dishonor as they had 
no funds in the hands of the drawee when they drew the drafts. 

Contract of an indorser. The contract of an indorser of 
an inland bill of exchange or a note or a check, is that he 
will pay the holder : 

1. On presentment and demand of payment, 

2. Where there is notice of dishonor. 

On a foreign bill of exchange he agrees to pay: 

1. On presentment and demand, 

2. Protest, 

3. Notice of dishonor. 

By presentment is meant presenting the instrument to 
the maker, drawee, or acceptor. By demand is meant 
asking the party to accept or pay. 

The place where presentment is to be made may be 
given. If it is not given, it is payable at the place of busi- 



172 NEGOTIABLE INSTRUMENTS 

ness of the maker or acceptor. Or if he has no place of 
business, it is payable at his residence. 

If he lives in another State it must be sent to him. 

The instrument must be presented on the day it is due, 
if not payable on demand. But inevitable accident may 
excuse a delay. 

Presentment must be made during business hours at the 
place of business or within reasonable hours if presented 
at the residence. 

When the note is payable on demand presentment must 
be made within a reasonable time after it is issued. 

Protest. Protest is a formal writing of a notary public 
who certifies that an instrument has been dishonored. 

Foreign bills must be protested. Inland bills need not be 
protested. 



NOTICE OF PROTEST OF NOTE— Panta^rapb Ptg. & St.. Ca. BloomiogtoD. Ill 82421—1000 No. 6<( 

STATE OF ILLINOIS, l 

\ ss. .. 
COUNTY OF....McLean _ \ _ _ Ma7...„...2, jp.22,. 

siJi.—^ check /br ^. 20.00. , z)a*ed....AP?i.^...28.*_..1.922 p^^^^^^ Demand 

Signed by. B»....C«... Adama „ „ ^ 



Endorsed by Ppeato2i..E^....Eeed .ct. al. - - „ 

Being this day due and unpaid, and by me PROTESTED for non-payment, I hereby notify you that the pay- 
m*nt thereof has been duly demanded, and that the holders look to you for payment, dam>a^es, interest andeosU. 

First Jfatipi^ 

To ■..B.....C«....Adams.......„y. .^ - 



Notice of dishonor. Notice of dishonor must be given 
the drawer and each indorser. Any drawer or indorser not 
given notice is discharged. 

No particular words are necessary in a notice of dishonor. 

This notice must be given on the day following the dis- 
honor if the parties live in the same place. 

If the parties live in different places then: 

1. Notice must be deposited in the post office to go by 
mail the day after dishonor, or 



NEGOTIABLE INSTRUMENTS 173 

2. It must be delivered as soon as it would have been 
had it been mailed. 

An indorser on a promissory note which was not paid 
when due had notice of dishonor mailed to him at Spring- 
field, Illinois, where he was in the habit of receiving his 
mail. He lived at Ridgely — near Springfield — where he 
also received mail. He never received the notice. The 
court held that it was sufficient that notice was mailed to 
him to a post office where he was in the habit of receiving 
mail, whether it reached him or not. 

In Wooley vs. Lyon, 117 111. 244, notice was sent to Fruitport, 
Michigan, where the plaintiff had a place of business and received 
some mail, although he lived at Grand Haven and received mail 
there also. Sending notice to Fruitport was held to be sufficient. 

THE HOLDER'S RIGHTS 

Aholder indue course. Attention has already been called 
to the fact (see p. 158) that negotiable instruments differ 
from other contracts in one very important respect. When 
a negotiable instrument is assigned the party receiving 
it always gets as good if not a better contract than the 
original parties. He often gets a better contract because 
he is not bound by most of the defenses that might have 
prevented the original party from collecting. 

The general rule is that a ^^ holder in due course '' holds a 
valid title against the world. 

A '^holder in due course" is one who: 

1. Has taken an instrument complete on its face, 

2. Before it is overdue, 

3. In good faith, and 

4. For fair value. 



174 NEGOTIABLE INSTRUMENTS 

1. An instrument complete and regular on its face. 

Prins vs. South Branch Lumber Co., 20 111. App. 238, was an 
action on a note on which was written in red ink, ''This note is 
not negotiable.'^ The court held that these words would naturally 
'' arouse the suspicion of an ordinary prudent man, and such a one 
would not be willing to rest upon the conclusion that the words 
were idly written." It was not regular on its face. 

A check not indorsed is not complete and regular on 
its face. 

2. Before it is overdue. 

McCaffrey vs. Dustin, 43 111. App. 34, involved a note bought 
after it matured. Said the court, ''It is an elementary rule, that 
one who buys a note after its maturity takes it subject to all equities 
and defenses existing between the original parties to the instrument. 
A past due note is already dishonored and comes to one about to 
buy it, tainted with suspicion and discredited upon its face.'' 

3. In good faith. 

Hammond vs. Goodale, 38 111. App. 365, involved the question 
of whether the purchaser bought in ^^good faith.'' In this case he 
had his suspicions aroused but he inquired of the wrong party. He 
bought the notes for fifty cents on the dollar. The court held it 
was a question for the jury to decide as to whether this was ''good 
faith." 

4. For fair value. 

Harpham vs. Haynes, 30 111. 404, was a case upon a note for 
$285. It was proved that the holder of the note who was suing 
did not pay anything for it but took it so he could recover for 
another who had promised not to sue on it for two years. The 
court held he was not a holder ''in due course for fair value." 

In Garvin vs. Wiswell, 83 111. 215, an action was brought on an 
instrument which was to pay John Murphy or bearer $100.00 as a 
bounty for enlisting in the Civil War. The note was lost and found 
and put on the market where Wiswell bought it in good faith and 
for fair value. The court held Wiswell was entitled to it. 



NEGOTIABLE INSTRUMENTS 175 

The holder of an instrument can sue any one of the 
indorsers. He need not sue the last one. 

Any indorser can sue any prior indorser but cannot sue 
a party who signs after he did. 

To summarize, the general rule is that a '^holder in due 
course ^' holds a valid title as against the world. However, 
this rule is subject to some exceptions. 

The maker is not liable: 

1. If the instrument is a forgery. 

Commercial National Bank vs. Waggeman, 87 111. App. 171, 
involved a note that had the name of ^'Mrs. Harre" on it. It was 
proved the name was a forgery. The court held Mrs. Harre had not 
passed the title to it and she was entitled to possession of the note. 

In Ehrler vs» Branny 120 111. 503, Ehrler bought notes in good 
faith and for fair value. These latter turned out to be forgeries. The 
court held Ehrler could not recover from the person whose name was 
signed to the note as it was not his act. 

2. Or if it is altered by the party in lawful possession of it. 

In Burwell vs. Orr, 84 111. 465, the court held that when a 
promise to pay $3 is changed to $300 and no proof is offered as 
to who changed it the court will presume the holder of it altered 
it and it becomes void and cannot be collected by a later holder. 

Unless the defendant made the instrument in such a way 
that the alteration was easy to accomplish. 

In Harvey vs. Smith, 55 111. 224, the maker signed a note which 
was written partly in ink and partly in pencil. The pencil part 
was written in so as to qualify his liability. The penciling was 
erased and an innocent holder took the note showing the full 
liability of the maker. The maker was held liable on the note as 
it read after the erasure. 

3. Or if fraud was used in obtaining the instrument it 
may be void, but fraud used after the paper was obtained 
is no defense. 



176 NEGOTIABLE INSTRUMENTS 

4. When the instruments are void because of illegal con- 
sideration. 

Pope vs. Hanke, 155 111. 617, involved the validity of notes 
given for gambling debts. The notes were in the hands of innocent 
third parties. The court held the notes void. 

5. Or if the maker is incompetent. Nor does it make 
any difference whether the defendant lied as to his age. 

How negotiable instruments are discharged. Negotia- 
ble instruments are discharged: 

1. Payment by the debtor, 

2. Intentional cancellation by the holder, 

3. Where the principal debtor becomes the holder. 

QUESTIONS ON NEGOTIABLE INSTRUMENTS 

1. Define negotiable instrument. 

2. What is the meaning of the word negotiable? 

3. James C. Burns makes out a negotiable instrument, payable 

to Harris, signs it and leaves it on his desk. Has the title 
passed to Harris? Give reason. 

4. S. B. Hursh makes out one negotiable instrument "to bearer/' 

and another ^Ho Charles Wells or bearer." Must these be 
indorsed? 

5. Bosworth had negotiable instruments and a gold watch in a 

safety deposit box. The box was robbed and the contents 
sold to Douglas who bought in good faith and for fair value. 
Does Douglas get a good title? 

6. Name the essentials of a negotiable instrument. 

7. Fulton signed the following instrument: 



*^I hereby agree to pay S. S. Goodwin or order fifty dollars 
on June 30, 1921, payable at my office. 

April 14, 1920 Earl S. Hodges." 

Springfield, 111. 



NEGOTIABLE INSTRUMENTS 177 

Does this instrument contain all the essential elements of a 
negotiable instrument? 

8. Suit was brought on the following instrument: 



'Mf the crops are good this Fall I promise to pay to Ralph 
Perry or order one hundred ($100.00) dollars, July 17, 1920, 
payable at my residence. 

May 4, 1920 F. B. Hinners." 

Say brook, Illinois. 



Is the instrument negotiable or not? Give reason. 

9. H. W. Coles refused to take the following note because, he 
says, it is not negotiable. Is he correct? Give reason. 













^'McLean, Illinois, 












Nov. 1, 1921. 


Pay to M. 


B. 


Franklin 


or 


order $40.00 


in corn on demand. 
R. A. Ross." 



10. Is the following a negotiable instrument? Give reason. 



"Washington, Illinois, 
June 30, 1921. 

Pay to the order of Harvey Pollock or order $111.42 when 
his account at my store is satisfactorily settled. 

H. H. Harrison." 



178 NEGOTIABLE INSTRUMENTS 

11. Is the following negotiable? Give reason. 



"Hume, Illinois, 
December 22, 1919. 

Pay to Glenn Tucker or order $1,000 on the day of my 
death. 

Howard Vaughn." 



12. Name three kinds of negotiable instruments. 

13. Define a bill of exchange. 

14. Compare it with a draft. 

15. Name the two kinds of bills of exchange. 

16. Define each. 

17. Define a check. 

18. George F. Hughes had a checking account with a bank in 

Kewanee, Illinois. He never had had more than two or three 
hundred dollars on his checking account, but writes a check 
for six hundred dollars. Must the bank pay it? 

19. What is a certified check? 

20. Is a certified check absolute or conditional payment? 

21. Define a promissory note. 

22. Why was there no contract in the case of Mayo vs, Cheno- 

weth? 

23. Is the following written statement a promissory note? Give 



Pay to the order of G. 
demand. 


L. 


Porter 


or 


B. 


C. 

W 


'Tontiac, 111., 
Sept. 6, 1921. 

Porter $7.00 on 
. B. Carter." 



24. What does 'indorse" literally mean? 



NEGOTIABLE INSTRUMENTS 179 

25. Gordon, an army supply officer, was accustomed to mark con- 

tracts submitted to him, ^' O. K. R. D. G/' if he accepted them. 
C'R. D. G.'^ being his initials.) What case cited in the 
text decides whether this is a vahd signature? 

26. Qalvin without any authority from Gordon and without his 

consent signed one of these contracts, ^^O. K. R. D. G." Is 
this a vahd signature? 

27. Name the kinds of indorsement. 

28. What case answers the question, ^'when an instrument is 

signed without recourse is the indorser reheved of all liability? 

29. What is meant by presentment? 

30. What is protest? 

31. When musfc notice of protest be sent? 

32. Who is a ^'holder in due course?'^ 

33. In what three ways can a negotiable instrument be discharged? 



CHAPTER VIII 

PARTNERSHIPS 

Defined. A partnership is a legal relation, based upon a 
contract whereby persons as principals unite their property, 
labor or skill in carrying on a business for their joint profit. 

(Students should be careful to use the word ''partners'^ 
and not '^pardners/' which is only a corruption.) 

An association not organized for gain is not a partner- 
ship. Thus the Young Men's Christian Association is not 
a partnership. 

In Chicago and Alton R. R. Co, vs, Mulford, 162 111. 522, it was 
held that the sale of a through ticket by one railroad company 
for travel on another road does not make the two companies part- 
ners, but the company selling the ticket merely acts as agent for 
the other line. 

How formed. Partnerships may be formed by express 
or implied contracts. 

Express and imphed contracts have already been ex- 
plained (see p. 19). 

In Haug vs. Haug, 193 111. 645, A. Haug and his son Martin 
were engaged in the hardware and furniture business under the 
name ^' A. Haug & Son.'* The son died and the father continued the 
business and appropriated the property used in the business. The 
son's wife brought suit in which she alleged that a partnership 
existed between the father and son and she asked for an accounting 
of the son's interest in the partnership property. Held, that al- 
though there was no evidence of any express contract of partnership, 
either written or verbal, the existence of a partnership could be 
implied from the circumstances. 

180 



PARTNERSHIPS 181 

It is not always necessary to have the contract of 
partnership in writing. However it is not uncommon to 
have articles of copartnership drawn which define the 
duties of the partners, the duration of the agreement and 
other matters of importance. Disputes are often avoided 
by having the agreement in writing. 

However, because of the fifth part of the Fourth Section 
of the Statute of Frauds, if the terms of the partnership 
are not to be performed within the space of one year from 
the making thereof, it is unenforceable. (See Statute of 
Frauds, p. 63.) 

But contracts of partnerships formed to hold land do 
not come within the fourth part of the Fourth Section of 
the Statute. 

In Van Housen vs, Copeland, 180 111. 74, four parties went together 
and purchased property on which they erected a large apartment 
building, for the purpose of renting and managing the same for 
profit. They first drew up a written agreement but subsequently 
they changed its terms by an oral contract. In an action of account- 
ing the court adjusted the rights of the parties according to the oral 
agreement, holding that an oral agreement to form a partnership 
for the purpose of trading in real estate for profit is not within the 
Statute of Frauds. 

Why form partnerships? Partnerships are formed to 
combine a greater amount of capital or to prevent com- 
petition or to reduce expenses or to combine capital and 
skill. 

Formerly partnerships were preferred to corporations 
because the expense incident to forming a corporation was 
too great. This is no longer the case however. The ex- 
pense of incorporation is small. 

The advantage of a partnership that probably means the 
most to the members is the right of choosing the persons 
that are to be in the firm. The consent of all is necessary 



182 PARTNERSHIPS 

to the admission of a partner into the firm. Nor can one 
become a partner by reason of being an heir of a deceased 
member. 

Agreements to form partnerships. An agreement to 
form a partnership does not create a partnership. There 
can be no partnership until the parties actually enter upon 
the execution of the agreement. 

Doyle vs. Bailey, 75 111. 418, was a suit for a share in the profits 
earned by Bailey in contracting for and erecting the Cook County 
jail and the criminal court building in the city of Chicago. Bailey 
had been awarded the contract for the foundation and had com- 
pleted the work. He entered into an agreement with Doyle that 
they should get together and bid for the erection of the building 
from the foundation, and furnish the materials, perform the work 
and share in the profits of the enterprise. But before the contract 
was let for the erection of the building, Bailey notified Doyle that 
he was going to bid for the work for himself and told Doyle to do the 
same if he so desired. Bailey bid for the job, was awarded the con- 
tract, and after he completed the work, Doyle brought his action for 
a share in the profits without having taken any part in the erection 
of the building. Held, that the agreement to do the work together 
did not create a partnership but was only an agreement to form a 
partnership. 

Must be for lawful purpose. A partnership may be 
created for any lawful purpose. It must not be for a pur- 
pose contrary to public policy or illegal. 

Where partners are guilty of entering into an illegal 
partnership, courts leave the parties where they are, and 
will not aid either. (See p. 52.) 

Craft vs, McConoughy, 79 111. 345, was a bill in equity for an ac- 
counting between the members of an alleged partnership in the 
grain business. The grain dealers in the city of Rochelle entered into 
a secret agreement to join in the profits of the business in the 
locality, the interest of each being based on a certain proportionate 
number of shares. So far as the public had knowledge each dealer 



PARTNERSHIPS 183 

continued his own business as theretofore, but was to abide by the 
prices fixed by the association. Secret meetings were held at night 
by the parties to the contract, at which meetings the price to be paid 
for grain was agreed upon. The combination was evidently in 
restraint of trade and the court refused to entertain the bill for an 
accounting between the parties to the agreement, leaving them 
where it found them. 

Firm name. When parties enter a partnership they 
usually take a firm name. In general it may be stated that 
any name may be taken that the firm chooses. 

In Edgerton vs. Preston, 15 111. App. 23, Edgerton and Sloan 
were partners under the firm name of '^Garden City Veneer Mills." 
In a law suit it was alleged that this was not the name of any person 
or duly organized corporation. The court said, ^'It is familiar law 
that the name or style of a partnership is wholly conventional, and 
that, in the absence of a restrictive statute, a firm may adopt any 
name it sees fit.'^ 

Kinds of partnerships. Partnerships are usually classi- 
fied as: 

1. General, or 

2. Special. 

A general partnership is one formed to carry on a general 
kind of business. While a special one is formed to carry out 
a single transaction. 

Who may be a partner. The rule is that any person 
competent to contract may become a partner. An infant 
may be a partner but the contract is voidable as to him 
although the adult partner is bound. Like any other con- 
tract the infant may affirm or disaffirm when he becomes 
of age. 

In Illinois a married woman cannot make a partnership 
contract without her husband's consent, but she can be a 
partner with her husband. 



184 PARTNERSHIPS 

Ileyman vs. Heyman, 210 III. 524, was a suit for divorce, in 
which Mrs. Heyman asked that the court render an accounting of a 
business in which she and her husband were engaged. The business 
was carried on under the name of ^'S. Heyman & Co.'' In decreeing 
the divorce the court held that a partnership existed between the 
husband and wife, although there was no express agreement estab- 
hshed by the evidence; and the husband, who had taken complete 
charge of the business, was ordered to pay to the wife one-half of 
the assets of the partnership. 

Agency in partnerships. Each partner is the agent of 
the firm within the general scope of the business of the 
firm. He is not an agent (unless special authority is given) 
to bind the firm in dealings outside its business. 

The rule of partnerships is, ^^ notice to one partner is 
notice to all." This is merely an application of the rule 
that each partner is the agent of all the partners. 

In Tenney vs. Foote, 95 111. 99, a member of a firm of grain 
dealers entered into a gambling contract in the name of the firm for 
trading on the board of trade. In settlement of the contract a note 
was given to the firm for the balance due, and it was held that the 
note was void and uncollectable because of the illegality of the con- 
tract. The firm was charged with notice of the illegal transaction 
and held liable. 



DUTIES, RIGHTS AND POWERS OF PARTNERS 

The duty of exercising good faith. The success of the 
partnership venture depends to a great extent upon the 
honesty and good faith of each partner. Each is legally 
bound to do all in his power to promote the welfare of the 
firm. 

In Linn vs. Clark, 295 111. 22, the court said, ^4t is the duty of 
every partner to conduct the business of the partnership for the 
common benefit of all the partners and use his best skill, care and 
judgment." 



PARTNERSHIPS 185 

Must keep accounts. In order that each may be fully 
informed as to all transactions and know the financial 
condition of the firm, accounts must be kept. 

Extra compensation. It may be that one partner will 
work longer hours or harder or be more valuable to the 
business than the other partner. The question then arises 
whether he can secure extra compensation for this. The 
courts hold that he cannot. 

In Burgess vs. Badger, 124 111. 288, the court said, *'In the absence 
of a stipulation to that effect, one partner is not entitled to charge 
his co-partners for his services, because he has done more than his 
just proportion of work. The law never undertakes to measure and 
to settle between the partners their various and unequal services 
bestowed on the joint business." 

But there may be either an express or implied agreement 
that under these circumstances extra money is to be paid. 

In Askew vs. Springer, 111 111. 662, partners were engaged in 
the business of buying land and selling it in lots. According to the 
original agreement between them each partner was entitled to a 
commission of five per cent on all sales made by him. One of the 
partners made no claim for his commissions during the continuance 
of the firm, but upon its dissolution he was allowed to include in the 
accounting his claim for commissions earned. 

The powers of the partners. A majority of the firm 
have power to decide questions arising in the business. 

But the majority cannot change the nature of the busi- 
ness against the wishes of the minority. To illustrate, if 
five men invest money in the business of manufacturing 
furnaces, three of them cannot change the nature of the 
business against the wishes of the other two and start 
manufacturing school desks. 

Each partner has implied power to borrow money for 
partnership purposes. Each partner has implied power to 



186 PARTNERSHIPS 

bind the firm in signing a negotiable instrument if it is 
done in the course of its business. 

In Funk vs. Babbitt, 55 111. App. 124, Francis M. Funk and Ira 
Lackey had been partners. Lackey borrowed money from Babbitt 
signing the firm name to the notes. After the dissolution of the 
partnership, Babbitt secured judgment against Funk and Lackey 

. as partners. Funk appealed, claiming among other things that the 
money was used by Lackey individually and was not turned over 
to the firm account. The court held '4t was abundantly proven that 

. Lackey signed the firm name to each of the notes. He had full power 
to borrow money for the purpose of the partnership and give notes 
of the firm therefor." 

But a person loaning money to a party who is a mem- 
ber of a firm cannot recover of the firm by showing 
that the borrower applied the money to the use of the 
firm. 

Liability of the partners. Each partner is liable for all 
the debts of the partnership. 

Dissolution. Partnerships may be dissolved by : 

A. Act of the parties. 1. Lapse of time, 

2. Accomplishment of object, 

3. Mutual agreement, 

4. Act of one partner. 

B. By operation of law. 1. Death of a partner, 

2. Bankruptcy. 

C. By judicial proceedings. \. Misbehavior, 

2. Failure of business, 

3. Incompetency of a partner. 

A. Act of the parties. 

1. When the period agreed upon for the continuance of 
the partnership has expired the partnership is ended. 

2. Or it may be dissolved when the object of the partner- 
ship has been accomplished. 



PARTNERSHIPS 187 

3. Or the partners may mutually agree to dissolve and 
their agreement will be valid*. 

Richardson vs. Gregory j 126 111. 166, was a suit for an accounting 
between the parties, as partners. In 1870 Richardson and Gregory 
agreed upon a partnership for the business of manufacturing plows, 
for which Richardson had a patent. They continued in such business 
for about three years and then ceased operations altogether. The 
partnership by the original agreement was to continue for the life 
of the patent, but in 1878, before that time arrived, the parties made 
a settlement. Richardson, who was dissatisfied with the settlement, 
filed his bill for an accounting between the parties, as partners. The 
bill was dismissed on the ground that no partnership existed after the 
settlement of 1878; that the firm was dissolved by mutual consent. 
Richardson's bill was filed more than five years after the date 
of the settlement and the Statute of Limitations also operated to 
defeat his suit. (See p. 74, for Statute of Limitations.) 

4. One partner may dissolve the firm. 

Blake vs. Sweeting j 121 111. 67, was a suit for an accounting of 
partnership affairs between Blake, Sweeting, and one Huston, who 
had been engaged in the manufacturing and laying of brick. About 
three years after the partnership was formed, Huston went away, 
abandoned the business of the firm, and thereafter had nothing to 
do with its affairs. Blake and Sweeting then agreed to carry on the 
business together. It was held that the departure of Huston con- 
stituted a dissolution of the original partnership. 

In McCall vs. Moss, 112 111. 493, a partnership continued for 
a number of years in Peoria, under the name of Moss, Bradley & 
Co. At different times one member would sell his interest in the 
firm, the purchaser would be admitted as a new member but the firm 
continued under the original name, but was numbered as firm 
No. 1, 2, 3, 4, or 5, as changes were made and an accounting was had 
on the basis that each change was a dissolution of the prior firm. 

Although a partner has the power to dissolve by with- 
drawing he is liable in damages for withdrawing before 
the time limit has expired. 



188 PARTNERSHIPS 

B. By operation of law. 

1. The death of one partner instantly dissolves the 
firm. 

In Remick vs. Emig, 42 111. 343, after the death of one partner the 
two remaining partners continued in the business, which was the 
operation of a flour mill, and spent about two thousand dollars in 
the building of a granary. Held, that at the death of one partner, 
^'the partnership was, i'pso facto y dissolved, and the survivors 
had no lawful right to expend the money of the firm in the erection 
of a granary, however necessary it may have been to the conduct of 
the business. '^ 

2. Bankruptcy will produce the same results. 

C. By judicial proceedings. 

1. Misbehavior of one partner is ground for a dissolu- 
tion of a partnership in some instances where that mis- 
conduct is very serious — as in the case of dishonesty. 

In Maker vs. Bull, 44 111. 97, Bull entered into an agreement with 
Maher and Kelly for a partnership in the coal business. Bull was 
to furnish the coal from Buffalo; Maher was to provide a coal yard, 
and he and Kelly were to manage the sale of the coal. Maher and 
Kelly failed to account to Bull for money derived from the sale of 
the coal, and he filed a bill in equity for a dissolution of the partner- 
ship. The bill was allowed and Maher and Kelly were required to 
render an accounting. 

Mere differences of opinion or misconduct that do not 
result in serious injuries however will not be grounds for 
dissolution. 

In Gerard vs. Gateau, 84 111. 121, a partnership for the manufac- 
ture and sale of zinc products was organized for ten years. At the 
end of two years of very successful business, Gerard, who had put 
in the most money but was paid interest for the excess, filed a bill to 



PARTNERSHIPS 189 

dissolve the partnership because Gateau, who managed the business, 
was not courteous to customers, and because he overvalued the 
property he put into the business as capital. It was proved that the 
business was quite a success in spite of the alleged ill manners of 
Gateau. Held, that where the misconduct of a partner is not in- 
jurious to the complainant's interest, or where any disagreement 
between the partners is as much the fault of one as the other, the 
partnership will not be dissolved for misconduct. The overvalua- 
tion, by Gateau, of his interest in the capital, was held to be a matter 
for settlement when the partnership affairs were adjusted at the 
expiration of the term agreed upon. 

But the party guilty of the misbehavior cannot ask the 
court to dissolve — only the innocent have this right. 

As the court said in the case just cited {Gerard vs. Gateau), 
to justify the dissolution of a partnership, on the ground of un- 
friendly relations between the partners, it must be at the instance of 
the party who is not himself at fault, and the estrangement must be 
such as to prevent the successful management of the business. The 
author of the ill-feeling can not make the relation he has brought 
about the ground of dissolution. 

2. If the business is a failure and there is no possibihty 
of success the courts will decree a dissolution since neither 
partner can gain by the continuance. 

3. The courts may decree a dissolution where one of 
the partners is incompetent, but the fact that he is in- 
competent will not of itself, ipso facto, dissolve the firm. 

In Bissell vs. Pierce^ 184 111. 60, certain parties agreed to go to- 
gether in buying, improving and selling lots for a profit. One of the 
parties became insane, and the other parties filed a bill for an 
accounting and division of the property. Although the agreement 
recited that the association should not be regarded as a partnership, 
the court applied the following rule applicable to partnerships: 
*' Where parties become partners under an agreement by the terms 
of which the capital of one is put against the skill, judgment and ser- 
vices of the other, and the one contracting to furnish his skill, judg- 



190 PARTNERSHIPS 

ment and services is subsequently materially incapacitated therefor 
by reason of insanity, a court of equity has power to decree a ter- 
mination of the contract and sell the property involved and distribute 
the proceeds according to the rights of the parties." 



NOTICE OF DISSOLUTION 

Why notice must be given. Notice of the dissolution of 
the partnership must be given to protect parties that 
might deal with the members of the firm as partners rather 
than individuals. 

Where the partnership is dissolved by act of the parties 
notice must be given. 

If dissolution is by operation of law or by judicial 
proceedings, notice need not be given by any party be- 
cause the dissolution of itself furnishes enough publicity 
to give every one notice of the act. 

Two ways in which notice is given. In regards to notice 
there are two classes of people: 

1. Those who have had previous dealings with the 
partnership. 

2. Those who have not. 

Notice must be given to both classes. 

Those in the first class must be given actual notice of 
the dissolution. These persons must learn that the firm 
has been dissolved. It makes no difference how they learned 
it, but they must have learned it. Notice may have been 
sent by a telegram or telephoned. It is usual to send out 
letters to each of the persons who have dealt with the firm. 

In Meyer vs. Krohn, 114 111. 574, the plaintiffs sued the defendants 
for the price of goods delivered to a partnership of which the de- 
fendants had lately been members. The defendants pleaded that 
they were not liable for the debts of the partnership contracted 
after their withdrawal from the firm and proved that they had mailed 



PARTNERSHIPS 191 

notice of their withdrawal to the plaintiffs. The plaintiffs, on the 
other hand, proved satisfactorily to the jury that they never re- 
ceived notice of the defendants' withdrawal, and the court held the 
rule to be that actual notice must be given to persons who have 
dealt with the firm. The defendants' evidence that they mailed the 
notice to the plaintiffs' address would have been sufficient had it not 
been overcome by the proof that the notice was never received. 

Merely publishing such notice in a newspaper is gener- 
ally not sufficient notice to those of the first class. 

Notice to those in the second class may be given in vari- 
ous ways. Probably the most common and satisfactory way 
is to advertise the fact in a newspaper that is very generally 
read in the place where the firm's business is transacted. 

Effect of not giving notice. It is important to know 
the effect of not giving notice. When the partnership, 
has been dissolved and notice is not given the acts of any 
former member bind the others. 

LIMITED PARTNERSHIPS 

How organized. The Statute of Illinois provides that 
limited partnerships may be organized where there is at 
least one general partner and at least one person who shall 
contribute money or property but the latter shall have 
no authority to bind the firm. 

The party who contributes the money but has no power 
to transact any business is known as a ^^ special partner." 

There are certain simple requirements that must be 
complied with, before such a hmited partnership is valid. 

The general partner is liable for all the debts of the firm. 

The special partner is liable for the amount he has 
invested. 

But if the statute is not complied with the limited 
partners will be held liable as general partners. 



192 PARTNERSHIPS 

In Henkel vs. Heyman, 91 111. 96, the special partner put $15,000 
into a limited partnership engaged in the wholesale liquor business. 
The statute recjuired such a partnership to make a certificate of its 
organization, also a certificate that the money of the special partner 
had been paid in, accompanied by affidavit of the truth of the cer- 
tificates. These papers the statute required to be filed in the office 
of the county clerk. The parties in this case took said papers to 
the clerk but afterward took them away again and they were never 
permanently filed. Held, that the statute required said papers to 
be filed, and not merely filed for record as in the case of deeds. In 
an action against the partners the special partner was held liable as a 
general partner. 

JOINT STOCK COMPANIES 

Resemble partnerships. Joint stock companies are 
partnerships with special provisions. Since they are 
partnerships each member is liable for all the debts as a 
partner. 

In Wadsworth vs. Duncan, 164 111. 360, held that as to third 
parties the members of a joint stock association are partners, and 
each member is liable for the debts of the association. 

They differ from ordinary partnerships in two respects. 
First, the interests of any partner may be transferred 
without the consent of other members. Second, each 
partner is not the agent of the other partners but only the 
officers elected by the members can legally bind the firm. 

QUESTIONS ON PARTNERSHIPS 

1. Define a partnership. 

2. Why isn't the Y. M. C. A. a partnership? 

3. In what two ways may a partnership l)e created? 

4. Must partnership agreements be in writing? 

5. Why should partnership contracts be in writing? 

6. Why are partnerships formed? 



PARTNERSHIPS 193 

7. On September 7th, Miner and Gordon agreed to form a partner- 

ship to commence January 1, 1922. On November 1, 1921, 
Gordon refused to fulfill the contract. Was there a partner- 
ship? 

8. Forrest and Wade entered into an illegal partnership agreement 

to raise prices and Wade lost 110,000. He then sought to 
recover the money. Could he do so? 

9. What firm name may be taken by partners? 

10. Name the two kinds of partnership. 

11. Morrell, an infant, enters into a partnership agreement with 

an adult. Is the agreement binding? 

12. Mrs. Frank Fields, a widow, and Mrs. Howe, the wife of Charles 

S. Howe, form a partnership to exist for ten months. There 
is no writing. Is there a valid partnership? Give reason. 

13. Why was the firm held liable for the act of the partner in Tenmj 

vs. Footef 

14. Simpson and Keith were partners. Keith became sick and was 

unable to work for six months which meant that Simpson had 
to do his work. Is Simpson entitled to extra compensation? 

15. Robert Hurst, Chester Johnson and Clyde Allen invested $1,000, 

$750, and $1500, respectively as partners to manufacture 
a patented article. What is the liability of each for debt 
the firm owes? 

16. In what four wa^^s may a partnership be dissolved by act of 

the parties? 

17. In what two ways may a partnership be dissolved by operation 

of law? 

18. In what three ways may a partnership be dissolved by judicial 

proceedings? 

19. Why must notice of dissolution be given? 

20. What is the effect of not giving notice? 

21. Who is a '' special partner" in a limited partnership? 

22. What is the liability of a ^^ special partner"? 

23. What is a joint stock company? 

24. In what way does a joint stock company differ from an ordinary 

partnership? 

25. Thomas, Thompson and McMurry organized an amusement 

club and agreed to be partners, but said each should not be 
liable for more than $100 in debts. Perry demands payment 
of a $600 account against the club. Can he collect the full 
amount of his debt? 



CHAPTER IX 

CORPORATIONS 

Defined. A corporation is an association of persons 
joined together by law and endowed with the power of 
acting, for many purposes, as a single individual. 

History. Corporations of one kind or another have 
existed since before the time of Julius Caesar. (Elliott, 
Private Corporations.) In America corporations were 
early granted charters. The Hudson Bay Company, one 
of the earlier corporations, was organized in 1670. It 
retained its exclusive rights until 1867, and is still in 
existence. In the United States charters were granted by 
the representatives of the Crown and a few times by the 
Crown itself. In Massachusetts today there is an artillery 
company that has been in existence since 1637. Formerly 
the charters were granted by the Crown, the Governor, 
or the Legislature. In Illinois today the charters are 
granted in * conformity with the laws passed for this 
purpose by the State Legislature at Springfield. Since 
the corporations are creatures of the State they are bound 
by any limitations the State may impose. One of these 
conditions is that before a charter is granted three adult 
persons, one of whom is a citizen of Illinois, must apply for 
it. Congress may also create corporations that are suitable 
for the carrying on of the National Government. 

In McCullough vs. Manjland, 4: Wheat. (U. S.) 416, the United 
States Congress incorporated a national bank for the purpose of 
handUng the finances of the Federal government. One branch of 
this bank was situated in Baltimore, Maryland, and the State of 

194 



!► 



CORPORATIONS 195 

Maryland levied a tax on all banks within the State. In an action 
by the State against McCullough, the cashier of the national bank 
at Baltimore, to collect this tax the Supreme Court held that Con- 
gress had power to create such a corporation for the purpose of 
carrying on the business of the Federal government and that the 
State of Maryland had no right to tax an agency of the Federal 
government. This was a most important case, as it involved both 
the right of Congress to create a corporation and also resulted in a 
decision as to the supremacy of the Federal government over the 
taxing power of the States. 

Need of Corporations. Corporations are needed to 
carry on the great enterprises of modern life. Railroad 
systems could not be built by private means, by partner- 
ships, nor joint stock companies. Corporations alone can 
do this. The same is true of great manufacturing and 
other undertakings. 

Kinds of corporations. While it is not exactly correct 
to speak of a quasi-public corporation, yet the following 
division is perhaps the clearest yet given: 

1. Public. 

2. Quasi-public* 

3. Private. 

1. Public corporations. Corporations of this class are 
cities, towns and some townships. The City of Bloom- 
ington is an example. 

2. Quasi-public corporations. These corporations in- 
clude those private corporations doing business that affect 
the public to a great degree. Corporations of this class 
include gas, water and light companies. 

These corporations are generally subject to extensive 
control to protect the public. The Inter-State Commerce 
Commission regulates the railroads in Inter-State traflfic. 
Similar boards regulate other quasi-public corporations. 

* Quasi; in the nature of. 



196 CORPORATIONS 

In Freeport Water Co. vs. City of Freeport, 186 III. 179, it was 
held that a city which has contracted for a water supply to its 
inhabitants at a certain rate has authority to pass an ordinance re- 
ducing the rate contracted for, although the time had not elapsed 
during which the previous rate was to be in effect. The corporation 
furnishing the water supply was subject to the provisions of the act 
under which it was incorporated and which permitted the city, as 
agency of the State Legislature, to change its contract. 

In Wagner vs. City of Rock Island^ 146 111. 139, it was held that 
a city could go into the business of supplying water to its inhabitants 
and charge any reasonable rate therefor, even though the rate 
charged brought a profit into the city treasury. 

3. Private corporations. A private corporation is one 
formed to advance the interests of its particular members. 
To determine whether the corporation is private it is 
often necessary to learn if it was organized for the sole 
benefit of its members or whether it is partly for the 
benefit of the public. Most corporations are of this class. 

Commercial law deals for the greater part with the 
private corporations. 

Kinds of private corporations. There are two kinds : 

1. Non-stock. 

2. Stock. 

Non-stock corporations. Non-stock corporations are 
those corporations which do not have stock. The member- 
ship of the society is determined by the vote of the 
members already in the association, at any given time. 
Churches and various clubs are non-stock corporations. 

A member has only such rights as the constitution and 
by-laws give him and he may be expelled for good cause. 

In Board of Trade vs. Nelson, 162 111. 431, it was held that the 
Chicago Board of Trade could establish its own rules as to the 
expulsion or suspension of its members and any member who was 



CORPORATIONS 197 

suspended or expelled from membership in accordance with such 
rules could not in a court of equity compel the officers and directors 
or the board to permit him to resume his rights and privileges as a 
member. 

Stock corporations. Stock corporations are corporations 
that issue shares of stock. Unless the contrary is specified 
it should be understood that '^private stock corporations" 
are meant when '^corporations" is written. 

Membership. To become a member of a corporation 
one only needs to own a share of stock. 

Certificates are usually given to show that the party is 
a member. But the certificate is not necessary. It is 
merely given to prove who is the owner, and this may 
often be proved by other means. 

Stock may be ti*ansferred from one party to another by 
complying with a few formalities, one of which is having 
the transfer recorded on the books of the company. 

Kinds of stock. It is not unusual to have both common 
and preferred stock issued. Preferred stock is that which 
gives some special advantage to the holder. This advan- 
tage generally is the right to prior payment of a dividend 
and prior payment on the dissolution of the corporation. 

Powers. The powers of the corporations are either : 

1. Express. 

2. Implied. 

The express powers are those that the legislature ex- 
pressly grants. 

Implied powers are those that are necessary and } roper 
in carrying into execution the express powers. 

In People vs. Pullman Palace Car Co., 175 111. 125, the Pullman 
Company was charged with having exceeded its corporate powers. 
The charter of the company gave it express power to buy, own, and 



198 CORPORATIONS 

sell land, necessary for the successful prosecution of its business of 
manufacturing and selling railway cars. From such a grant of ex- 
press power the company was held to have impUed power to build 
an office building in the city of Chicago although the building con- 
structed was larger than was needed for the purposes of the business 
at the time it was built. Outside the city the company had purchased 
a large amount of land where its factory was located. Here the com- 
pany built and rented homes to its employees, conducted grocery 
stores, built and owned a school house and a church, where religious 
services were held for the benefit of the employees. In fact, a village 
of two thousand people, the town of Pullman, was owned by the 
company. These acts were held to be beyond the powers of the 
corporation, either express or implied. 

Ultra vires acts, A corporation has no power that is 
not conferred by charter or statute. In the case given 
above the Pullman Company ^s acts in building the houses, 
school and church were ultra vires, (^^Ultra/^ beyond; 
^^ vires/' powers.) 

In People vs. Chicago Gas Trust Co., 130 111. 268, the Chicago 
Gas Trust Company was charged with monopolizing the manu- 
facture and sale of illuminating gas in the gUj of Chicago. This 
corporation had purchased the stock of four other gas companies 
and virtually controlled the distribution of illuminating gas within 
the city. It was held that the charter of the Chicago Gas Trust 
Company, which gave it the power to maintain and operate works 
for the manufacture and sale of gas, was not a grant of power to 
purchase stock in other gas companies. 

In People vs. Chicago Live Stock Exchange, 170 111. 556, a rule 
of the Exchange forbidding the employment of any solicitors in the 
commission business who were not members of the Exchange, and 
which limited the numbers of solicitors employed by members 
in certain States, was held to be beyond the powers of the Exchange 
and to be in restraint of trade. 

It is often difficult to decide whether a particular act is 
ultra vires or not. A corporation cannot engage in loaning 
of money, unless, 



CORPORATIONS 199 

1. Its charter expressly permits, or 

2. The business naturally involves it. 

Attributes of a corporation. Corporations, generally, 
have the following powers and attributes: 

1. The power of perpetual succession. 

2. A special name. 

3. The power to hold property. 

4. The right to a limited liability for its members. 

5. The right to sue and be sued in the corporate name. 

6. The right to make by-laws. 

7. The right to a corporate seal. 

1. Power of perpetual succession. The rule is that, 
though the members of a corporation die, the corporation 
never dies. This ability to exist is known as the power 
of perpetual succession. As will be seen later (see p. 205), 
however, the corporation may be dissolved, so the rule 
is not literally a true one. 

2. A special name. One of the attributes of a corpora- 
tion is its special name. The corporation may generally 
choose any name it desires. But it must not be identical 
with, nor too closely resemble that of any other corpora- 
tion. 

In Elgin Butter Co. vs. Elgin Creamery Co., 155 111. 127, it was 
held that the issuing of a license to the ''Elgin Creamery Com- 
pany," notwithstanding the previous licensing of the ''Elgin Butter 
Company," was not a violation of the corporation act which pro- 
vides that the Secretary of State shall not issue licenses to corpora- 
tions having the same name. 

International Committee of Young Women^s Christian Associa- 
tions vs. Y. W. C. A. of Chicago, 194 111. 194, was a suit by the 
Y. W. C. A. to enjoin the use of its name by the defendant. In the 
early organization of the association a certain group desired that a 
membership in some evangelical church should be a prerequisite to 
membership in the association but their proposition was rejected 



200 CORPORATIONS 

and tliey withdrew from the association and organized "The Inter- 
national Committee of Y. W. C. A." The court enjoined them from 
using such a name, as it enabled them to deceive the public into giv- 
ing them donations w^hich were intended for the Y. W. C. A. 

The rule is that when two corporations have names 
almost identical, the one first getting the charter may 
use it. 

In Hazellon Boiler Co, vs. Hazelton Tripod Boiler Co., 142 111. 
494, Hazelton had been engaged in the business of making and 
selling boilers in the State of New York and these boilers became 
known as the Hazelton boilers. Hazelton sold out his interest in the 
business and w^ent to Chicago where he organized a corporation with 
the name of "The Hazelton Tripod Boiler Company." The parties 
to whom he had sold his business in New York continued to manu- 
facture boilers but did not organize themselves as a corporation, 
The Hazelton Boiler Company, until after the organization of the 
Hazelton Tripod Boiler Company in Illinois. In an action to pre- 
vent the latter company from using the name "Hazelton" it was 
held that the defendant, being an Illinois corporation, and having 
been the first to incorporate had a right to use the name. 

3. The power to hold property. There is no rule of 
law that prohibits a corporation from holding as much 
personal property as it cares to hold. 

The law as to holding real property is otherwise. It is 
contrary to public policy in Illinois to allow corporations 
to own real estate beyond their reasonable needs. But 
church corporations are permitted to hold real estate, with 
certain restrictions. 

First M. E. Church of Chicago vs. Dixon, 178 111. 260, was an 
action to have the court hold that the 8harter of the First M. E. 
Church of Chicago authorized it to l)uild on its lot at the corner of 
Washington and Clark streets in Chicago a modern office building 
and to use the income from said building in maintaining a church 
at some other location not so near the business district of the city 



CORPORATIONS 201 

and more suitable for church purposes. The court held that under 
the charter the lot must be used ^'for purposes of religious worship" 
and that any building erected thereon must be devoted at least in 
part to such purpose and could not be used entirely for business and 
commercial uses. 

Educational corporations also may take and hold real 
estate. 

In Santa Clara Female Academy vs. Sullivan, 116 111. 375, a testa- 
trix devised all her interest in certain real property in Illinois to the 
Santa Clara Female Academy, a corporation organized for educa- 
tional purposes in the State of Wisconsin. It was held that under 
the laws of Illinois, the academy, although a foreign corporation, 
was authorized to hold real property in Illinois, provided it has 
authority to hold land by the laws of the State where it was in- 
corporated. 

4. The right to a limited liability for its members. The 

rule is that stockholders are liable only for the amount of 
their stock invested. This is of great importance since it 
allows people who have only a small amount of money to 
invest with the knowledge that they will not lose more 
than the amount invested no matter what happens. In 
the case of banks an exception exists and the stockholders 
are liable for double the amount invested. 

5. The right to sue and be sued in the corporate name. 
Corporations are allowed to sue as a matter of right. 
This is true even though the right is not expressly given. 
When not expressly given it will be implied. 

Since a corporation is separate and distinct from its 
members it sues and is sued in its corporate name. 

In Illinois State Hospital vs. HigginSy 15 111. 185, it was held that 
an action by the superintendent against the hospital to recover 
his salary would not lie against ^'The Illinois State Hospital for the 
Insane," where the proper name of the corporation was ''Trustees of 
the Illinois State Hospital for the Insane." 



202 CORPORATIONS 

In Marsh vs. Astoria Lodge No. 112, I. 0. 0. F., 27 111. 4.21, it 
was held that actions by the subordinate lodges of Odd Fellows 
should be brought in the name of the trustees of such lodges. 

A judgment against the members of a corporation when 
the corporation is sued, is void. 

Campbell vs. Brunk, 25 111. 225, was a suit between two corpora- 
tions. The suit was brought, before a justice of the peace, in the 
names of the individuals in the corporations and judgment was in 
favor of the plaintiffs by their individual names and against the de- 
fendants by their individual names. The Supreme Court held this 
was error. 

Since the members of a corporation are separate from 
the corporation, a member may sue the corporation. 

6. The right to make by-laws. By-laws are not nec- 
essary to every corporation. But usually the charter is 
not sufficient in itself in which case by-laws are provided. 

A corporation can make any by-laws if they are con- 
sistent with its charter, even though that right is not 
expressly given. 

Chandler vs. Northern Cross R. R, Co,, 18 111. 190, was an action 
by the railroad company against Chandler to recover a certain 
amount of stock for which he had subscribed and for which he had 
not paid. It was held to be no defense to the action that after the 
subscriptions were taken the board of directors adopted a bj^-law 
requiring payment of the first installment on stock to entitle the 
stockholder to a vote in the corporation. 

It is the better policy to have the by-laws in writing 
but it is not absolutely necessary that they be. 

7. The right to a corporate seal. It was formerly the 
law (with only a few exceptions) that a corporation could 
not contract except by using a seal. However the rule 
now is that a corporation needs to use a seal only when 
an individual is required to use one. 



CORPORATIONS 203 

MANAGEMENT OF CORPORATIONS 

Rights of stockholders. Each stockholder is entitled to 
have one vote for each share of stock. Should one party / 
hold the majority of stock, he is entitled to a majority / 
vote. 

A stockholder may give his vote to another party if he 
chooses. 

Ryder vs. Alton and Sangamon R. R. Co., 13 111. 516, was a 
suit by the railroad company to collect an assessment on certain 
shares of stock in the company for which the defendant had sub- 
scribed. It was held that it was no defense to the suit that the 
city of Alton, which had subscribed 1000 shares, had permitted 
certain other stockholders residing in the city of New York to 
have the proxy of the city of Alton in all the votes of the company, 
v/hich enabled the New York stockholders to have absolute control 
of the road for a certain length of time. The court held that the city 
had the right to give her proxy to vfhom it pleased and that it 
was ''none of the business of one stockholder for whom the votes of 
another shall be cast." 

One form of proxy is as follows : 



I hereby appoint Robert E. Kavanaugh, of Peoria, 
Illinois, my proxy with full power to vote for me and 
in my place at any and all stockholders' meetings 
of the Clark Manufacturing Co., a corporation. 

Witness my hand this 27th day of September, 
1921. 

George Smith, 
Witness: Clinton, Illinois. 

Paul McFarland, McLean, 111. 

0. V. Lemmons, Taylorville, 111. 



204 CORPORATIONS 

Right to examine books. The Courts have often sus- 
tained the right of any stockholder to examine the books 
of the corporation, so that he may better protect his 
interests. 

Stone vs, Kellogg, 165 111. 192, was a suit to compel the president 
and secretary of the Central Union Telephone Company to permit 
the complainant to examine the minute book of the executive com 
mittee of the company and to examine certain contracts which the 
company had entered into with the American Bell Telephone 
Company. The complainant was a stockholder and a director 
of the defendant company and the court held that he was entitled 
to examine the books and contracts of the company. 

But this examination must be made at a reasonable 
time and in a reasonable manner, and if the examination 
is for an improper or unlawful purpose it will not be 
permitted. 

In Meysenhurg vs. The People, 88 111. App. 328, Meysenburg 
refused to allow a discharged employee who was a stockholder to 
examine the books, alleging that he wanted to disclose the business 
secrets of the corporation to rivals. The court held that the only 
express limitation to examining the books is that the right shall be 
exercised at reasonable and proper times. The implied limitation is 
that it shall not be exercised for improper purposes. 

Majority rules. The holders of the majority stock have 
the right to control the corporation. Unless the action of 
the majority is illegal, the courts will not interfere, no 
matter whether the action is advisable or not. 

It is illegal to have the majority secure rights for itself 
that the rest of the stockholders do not enjoy. 

It is customary to have the stockholders elect a board of 
directors whose duties are to manage the affairs of the cor- 
porations. These directors represent the stockholders. 



CORPORATIONS 205 

Dividends. Dividends are declared by the directors. 
Until a dividend is declared all the profits belong to the 
corporation. When a dividend is declared each stock- 
holder is entitled to an equal part for each share he holds. 

DISSOLUTION 

How corporations may be dissolved. Corporations are 
dissolved by: 

1. The time limit of the charter expiring. 

2. The legislature repealing the charter. 

3. Forfeiture. 

4. Surrender. 

5. Courts of equity. 

1. Time limit expiring. The original doctrine of 
perpetual succession is not very important any more 
because the existence of a corporation is usually limited 
to a definite length of time. At the end of the time limit 
the corporation is dissolved. 

2. Legislature repealing the charter. A corporation 
cannot be dissolved by the legislature without the consent 
of the corporation unless the legislature reserved that 
right. 

Bruffett vs. The Great Western R. R. of 1859, 25 III. 310, was an 
action upon a contract against ''The Great Western R. R. Co. of 
1859.'* The legislature had attempted to re-incorporate and change 
the name of the existing railroad company, but it was held that the 
legislature had no power to repeal the existing charter. 

The famous Dartmouth College Case {Trustees of Dartmouth 
College vs. Woodward, 4 Wheat. [U. S.] 518), was the first case to 
determine whether a State Legislature can repeal or amend the 
charter of a corporation without its consent. The Constitution 
of the United States forbids any State to pass a law impairing the 



206 CORPORATIONS 

obligation of a contract. In this case the United States Supreme 
Court held that the charter of Dartmouth College was a contract 
between the incorporators and the British Crown so the legislature 
of New Hampshire was not permitted to pass a law amending the 
charter after the Revolutionary War, 

3. Forfeiture. Whenever a corporation does an act 
that seriously affects the pubKc interests, the State can 
compel it to give up its charter. What constitutes such 
an act is decided from all the circumstances in the par- 
ticular case. 

A failure to list corporation property for taxation is 
not such an act. 

North and South Rolling Stock Co. vs. People, 147 111. 234, was 
a suit to dissolve a corporation because its officers never listed the 
corporate property for purposes of taxation. The property of the 
corporation was all tangible property existing in Illinois, within the 
reach of the officer whose duty it was to levy and assess taxes, and it 
was held that a failure by the corporation to list its property was not 
ground for declaring a forfeiture of the corporate franchise. 

When a corporation has failed to perform the objects of 
its incorporation, its charter will be forfeited. 

In People vs. Kankakee River Improvement Co,, 103 III. 491, 
the Kankakee River Improvement Company was organized to im- 
prove the channel of the Kankakee and Iroquois Rivers to the In- 
diana State line. The company failed to carry out the work for which 
it was incorporated and the court declared a forfeiture of the fran- 
chise. 

An unlawful combination to get a monopoly is a suf- 
ficient reason to dissolve a corporation. 

In Distilling and Cattle Feeding Co. vs. People, 156 111. 448, a 
trust was organized. The court held this was sufficient to cause a 
dissolution and it was dissolved by order of the court. 



CORPORATIONS 207 

4. Sxxrrender. A charter may be surrendered only with 
the consent of the State. 

5. Courts of equity. Equity courts have power to dis- 
solve or close up the business of a corporation and appoint 
a receiver of its assets whenever the corporation becomes 
unable to pay its debts or to continue in business. 

QUESTIONS ON CORPORATIONS 

1. Define a corporation. 

2. Who gives the charters of corporations? 

3. What corporations may Congress create? 

4. Name the three kinds of corporations. 

5. What kind of a corporation is the City of Elgin? 

6. Ten men in a city organized a corporation for the purpose of 

running a bus line to carry passengers and baggage. What 
kind of a corporation is it? 

7. A group of men in Galesburg organized a corporation to manu- 

facture paving bricks. What kind of a corporation is this? 

8. What determines whether a corporation is private or quasi- 

pubUc? 

9. What determines whether a corporation is a stock or a non- 

stock corporation? 

10. What are two common advantages of preferred stock? 

11. What do the words ^^ ultra vires ^^ mean? 

12. A corporation is authorized to buy, slaughter and sell cattle. 

It organizes a branch office to sell glue. Is this an ultra 
vires act? 

13. A corporation organized to buy and sell iron. Seeing that 

money could be made by manufacturing the iron, they manu- 
factured it. Is this an ultra vires act? 

14. If a corporation is organized to print books is it within its 

powers when it buys manuscripts to print? 

15. Name the seven powers and attributes of most private stock 

corporations. 

16. A corporation took the name, ^'Browning Biscuit Co.'' Four 

years later a corporation attempted to assume the name, 
^'Browning Biscuit and Cracker Co." Had it the right to 
this name? 



208 CORPORATIONS 

17. Who is entitled to vote in a private stock corporation? 

18. What did the court hold in Ryder vs. Alton and Sangamoii 

R. R. Co. about the right to give a vote to another? 

19. Weir was a stockholder in a corporation and wanted to examine 

the books because he thought the officers were cheating 
him. Had he the right to examine the books for this purpose? 

20. Who elects the directors of a corporation? 

21. In what five ways may a corporation be dissolved? 

22. What case decided that a State cannot pass a law impairing 

the value of a contract? 

23. Several men formed a corporation to extract silver from ore. 

It being unprofitable they sold all the machinery and quit 
work. Is this sufficient to declare a forfeiture for failing to 
perform the objects of its incorporation? 

24. A corporation decides to disband. Whose consent must be 

obtained before it can legally disband? 

25. When can a Court of Equity dissolve a corporation? 



CHAPTER X 

REAL PROPERTY 

Property. There are two kinds of property: 

1. Real, 

2. Personal. 

Real property is anything of a fixed, permanent and sub- 
stantial nature. It includes everything of an immovable 
nature, but not everything immovable. A house may be 
movable but it is real property because of an immovable 
nature. Land, growing trees, and coal in the ground are 
common examples of real property. 

Personal property is anything of a movable nature. 
Money, books, furniture and automobiles are common 
examples. 

Is the title good? Before real estate is bought it is 
customary to have a lawyer examine the title to learn 
whether the seller really owns the property. It is not 
uncommon for lawyers to find that titles are faulty. They 
discover whether the title is good, doubtful or bad by 
examining the abstract of title. 

An abstract of title (which is generally spoken of as an 
''abstract^') is a history, in brief, of all transactions of 
record involving the property in question. The abstract 
includes deeds, mortgages, judgments, taxes, assessments, 
court proceedings and anything else recorded at the 
Court House in the county where the land lies which 
affects the title of the real estate involved. From the 
facts given in the abstract the lawyer gives his opinion 

209 



210 REAL PROPERTY 

as to whether or not the title is good. This often avoids 
difficulty and the buyer knows what he is getting for his 
money. 

Torrens system. In Cook County the Torrens system 
is also in use. This system provides for an examination by 
officials. Their decision is law. But this system does not 
relieve the parties from employing attorneys to protect 
their interests. There has been much written as to whether 
or not this system is an improvement over the other. Those 
who favor it claim that it gives greater security at a smaller 
cost. Those who oppose it say it is not as reliable and 
costs more. Until there is more proof offered as to the 
advantages of the Torrens system^ people will not change. 

TRANSFER OF REAL ESTATE 

Methods of Transfer. There are many methods of 
transferring real property. In Illinois it is customary to 
have a writing to transfer real property. But there are 
exceptions: for example, after property is in the posses- 
sion of a party under certain conditions for seven years, 
or under other conditions for twenty years, it is his, even 
though he never made a contract nor had a writing. 

In Watts vs. Parker, 27 111. 224, it was held that if a grantor and his 
successors have held land for twenty years against all the world, their 
possession will ripen into a perfect title, absolute and indefeasible. 

For about 500 years after William the Conqueror arrived 
in England (1066) no writing was needed to transfer land, 
but it was transferred by livery of seizen. 

Livery of seizen was never common in the United States 
although we have record of its use in New York in 1827. 
{McGregor vs, Comstock^ 17 N. Y. 162.) In Illinois it is 
not necessary, although it is undoubtedly legal enough. 



REAL PROPERTY 211 

Latimer vs, Latimer , 174 111. 418, was a suit to set aside a deed 
on the ground that it was not sufficiently delivered. The grantor 
made the deed in his lifetime and gave it to a third party who was to 
deliver it to the grantee at the death of the grantor. It was con- 
tended that the grantor should have made a will if he wanted land 
conveyed after his death. The court held that as livery of seizen 
was not necessary this was legal. 

But under the Fourth Section of the Statute of Frauds 
no action can be brought upon any contract for the sale 
of any interest in real estate for a longer term than one 
year unless there is a note or memorandum in writing 
signed by the party to be charged or his agent thereunto 
lawfully authorized in writing. (See p. 63.) 

Two methods of transferring title to real estate are very 
important. They are, transfer by: 

1. Deed. 

2. Mortgage. 

Definitions. A deed is a writing signed, sealed and 
delivered, the purpose of which is the transfer of realestate. 

A mortgage is an interest in property given to secure 
the payment of a debt or some other obligation. 

Requisites of deeds. A deed is a contract, so the essen- 
tials of a deed are the essentials of a contract. But in 
addition to the general essentials there are certain re- 
quisites peculiar to deeds. 

In order that a deed be valid it must contain the fol- 
lowing requisites : 

1. Names of the parties. 

2. Operative words. 

3. Description. 

4. Signing. 

5. Sealing. 

6. Delivering. 



212 REAL PROPERTY 

Names of the parties. The party conveying is called 
the grantor. (In mortgages the party conveying is called 
the mortgagor.) 

The party receiving the deed is known as the grantee. 
(In mortgages he is known as the mortgagee.) 

Their names, or a sufficient designation of them, must 
be written in the deed. 

Operative words. It is very important to have '^opera- 
tive words/ ^ that is, words that will convey an estate. 

^^ Conveys and warrants, ^^ are the words used in war- 
ranty deeds. 

'^Conveys and quit claims,'^ are the words used in 
quit-claim deeds. 

'^Mortgages and warrants,'^ are the words used in 
mortgages. 

Without these or similar words the deed is invalid. 

Description. It is of the utmost importance, of course, 
that the real estate be properly described. 

Land is located in Illinois first by townships east 
or west of lines drawn North and South known as Prin- 
cipal Meridians and located North and South by base 
lines. 

The State is laid out in numbered townships six miles 
square. They are bounded on the north and south by 
township lines and on the East and West by Range 
lines. 

Each township is divided into 36 sections. Since each 
township is 6 miles square and 6 miles on a side, each 
section is a mile square and one mile long on each side. 
Each section of one square mile contains 640 acres. 
Natural obstacles, such as streams, cause numerous 
exceptions. 

A township is divided into sections and numbered as 
shown below: 



REAL PROPERTY 



213 



6 


5 


4 
9 


3 


2 


1 


7 


8 


10 


11 


12 


18 


17 


16 


15 


14 


13 


19 


20 


21 


22 


23 


24 


30 


29 


28 


27 


26 


25 


31 


32 


33 


34 


35 


36 



Land is often located by means of landmarks, trees, 
rocks, ponds, rivers, and railroads. 

Property in cities and towns is described by means of 
plats, divided into additions, subdivisions, blocks and lots. 

Signing. Signing was not necessary under the Common 
Law but it is now required. The reason why signing was 
not required was that in England in the early stages of 
the Common Law most of the people were not able to 
write their names. The parties should always sign their 
full names. 



In Gross vs. Village of Grossdale, 177 III. 248, the court held that 
the middle initial of a name is not a material part of a man's signa- 
ture. 

Seal. It has been necessary at Common Law since the 
Conquest of England by the Normans in 1066 to have a 
seal attached to deeds. Seals w^ere used instead of 
signatures because of the ignorance of the people, but 
now both are required. 

In Irwin vs. Powell j 188 111. 107, the court held that an instrument 
signed without a seal could not convey a title in land. 



214 REAL PROPERTY 

What a sufficient seal is has already been given. (See 
p. 20.) 

Delivery. A deed is of no effect until it is delivered. 
The courts also hold that there is no delivery until there is 
an acceptance of the deed by the grantee or his agent. 

In Herbert vs. Herbert, Breese 354 (1 111.), the grantor died before 
the grantee knew of the existence of the deed, and it was held that 
there could have been no delivery as it was impossible to prove an 
acceptance of the deed by the grantee when he did not know of its 
existence, even though it had been recorded. 

Hawes vs. Hawes, 177 111. 409, was a suit to set aside a deed 
on the ground that it was never dehvered. The grantor made 
the deed in favor of his daughter, put it in an envelope with her 
name on the outside, deposited it in his safety deposit box, and 
it was found there after the grantor's death, together with a slip 
of paper with the words, ^^ Record your deeds when you open this 
envelope.'' Held, that the deed never having been delivered to the 
grantee, was invalid as a conveyance. 

Acknowledgment. The grantor may declare on oath 
that the deed is his act — this is acknowledgment. It is 
not necessary to have a deed acknowledged to have it 
valid but it must be acknowledged before it can be 
recorded. 

Clark vs. Wilson^ 127 111. 449, held that although the acknowl- 
edgment is sealed with the notary's seal, if the signature of the 
notary is omitted the record of the deed is not evidence of its execu- 
tion. 

Filing deeds. All deeds should be filed for record in the 
county where the land lies. They are void as to creditors 
and purchasers if not filed, unless these parties have 
knowledge of them. 

When deeds or mortgages are filed they serve as notice 
to all of what interest the parties have in the property. 



REAL PROPERTY 215 

In Buchanan vs. International Bank, 78 111. 500, a party took a 
trust deed (in effect, a mortgage,) to secure certain promissory notes. 
There was a prior trust deed on the same land at the time the trust 
deed in question was accepted, but the party accepting the deed as 
security had no actual notice of the prior incumbrance. Held, that 
the record of the prior trust deed was, in legal effect, notice to all 
subsequent purchasers or mortgagees of the existence of said in- 
cumbrance on the land. 

In Merchants' & Farmers' State Bank vs. Bawdy, 230 111. 199, 
it was held that actual possession of land is notice equal to the 
record of a deed under which the party in possession claims. A 
purchaser is bound to inquire by what right or title the party in 
possession holds, and he will take subject to that title, whatever it 
may be. 

Date. Although a date is not absolutely necessary it 
should always be given. 

Quit-claim deeds. There are two kinds of deeds : 

1. Quit claim, 

2. Warranty. 

A quit-claim deed releases all the interest the gran- 
tor (seller) has. It does not claim to transfer any par- 
ticular interest but conveys whatever present interest 
the grantor may have. 

In Eastman vs. Littlefield, 164 111. 124, Eastman, by quit-claim 
deed, purchased the interest of the grantors in a certain tract of 
land. The grantors had previously incumbered the land with 
mortgages and trust deeds which had been foreclosed and the 
purchaser under the mortgage sales was in possession of the premises 
at the time the quit-claim deed was made to Eastman. It was held 
that Eastman took no better title than belonged to the grantors at 
the time the deed was executed, and if all their interest had been 
taken up by the mortgage sales, then no title was transferred by the 
quit-claim deed. 

Warranty deeds. The warranty deed contains certain 
warranties, either express or implied ones. 



216 REAL PROPERTY 

Unless there are express covenants to the contrary there 
are three implied covenants in a warranty deed in Illinois. 
They are the warranties of: 

1. Lawful seizen and the right to convey. 

2. No incumbrances. 

3. Quiet possession and defence against lawful claim- 
ants. 

These are of the same effect as if they were written in 
the deed. 

But these covenants are implied only where all the 
words of the Statute are used. 

In Wheeler vs. County of Wayne, 132 111. 599, the county con- 
veyed certain swamp lands by a deed which recited, ''there is 
granted to ... . the following described lands/' and it was 
held that such words, in the absence of an express covenant, imposed 
no obligation on the county to defend the title and that the deed 
was, in effect, a quit-claim deed. 

Lawful seizen and right to convey. ^'Lawful seizen '^ 
signifies '^ possession.'^ A party having the title generally 
has the right to convey. But he may have the right to 
convey and yet not be seized in fee. Executors often 
covenant that they have the right to convey under order of 
the court, when they do not claim to be lawfully seized. 

No incumbrances. An incumbrance is any interest in 
property held by another that lessens its value to the 
owner. Liens and mortgages are examples of incum- 
brances. 

In Beach vs. Miller, 51 111. 206, a party conveyed a tract of land 
by a deed with a covenant against incumbrances. A railroad com- 
pany operated a railroad across a portion of the tract, by virtue of a 
right of way which the grantor had previously conveyed to it. It 
was held that the existence of the railroad right of way across the 



REAL PROPERTY 217 

land constituted a breach of the covenant against incumbrances 
where the deed purported to convey the entire tract. 

In A Imy vs. Hunt, 48 111. 45, it was held that a lien for unpaid taxes 
on land constituted an incumbrance where the grantor covenanted 
that the premises conveyed ^* were free and clear from all liens, taxes, 
assessments and incumbrances of every kind.'' 

Quiet enjoyment and defence against claimants. This 
warranty in a deed is usually treated as protection to the 
buyer against being put out of possession. 

In Bostwich vs. Williams, 36 111. 65, the court said that a covenant 
of general warranty is usually treated the same as the covenant for 
quiet enjoyment, since the same circumstances are necessary for 
their breach and the rules as to the measure of damages are the 
same in both. 

ESTATES 

Definition and kinds. An estate is the extent of the 
interest which a party has in real property. 
There are three important estates. They are : 

1. Fee simple estates. 

2. Life estates, 

3. Estates for years. 

Fee simple estates. Every estate in lands which is 
granted is considered by law to be a fee simple estate un- 
less the contrary is expressed. 

In Turner vs. Hause, 199 111. 464, the court said, where an estate 
is given to A without the use of the words, ^' heirs and assigns," 
A will take a fee simple estate, unless the instrument reduces the 
estate to an estate less than a fee by express words, or by con- 
struction or operation of law." 

A fee simple estate is the highest and best estate known 
to the Common Law. ^'Estate in fee'' and ^'estate in fee 
simple'' are the same. While an estate in fee is the 



218 REAL PROPERTY 

highest estate it does not give an absolute title. The 
property may be taken from the owner against his wishes 
in certain cases. The owner may lose it: 

1. To his creditors for his debts, 

2. To the State: 

(A) For taxes, 

(B) For assessments, 

(C) Under the right of eminent domain. 

Eminent domain. The right of eminent domain is the 
right of the State to take private property for public use. 
The wishes of individuals must give way to the needs of 
the State. When the interests of the public will be fur- 
thered the right may be exercised. 

The Constitution of the United States and the Con- 
stitution of Illinois both prescribe that private property 
shall not be taken for public use without just compensa- 
tion. 

In the City of Bloomington vs. Latham, 142 111. 462, it was held 
that a proceeding to condemn a part of two lots for the opening 
of an alley between them is an exercise of the power of eminent 
domain, and in such proceeding the land condemned cannot be 
taken by the city without paying damages. The opinion reads: 
^^A provision for compensation is an indispensable attendant upon 
the due and constitutional exercise of the power of depriving an 
individual of his property under the right of eminent domain." 

Railroad companies may secure a right of way under the 
Eminent Domain Act, since railroads are a benefit to the 
public. 

Chicago and Western Indiana R. R. Co. vs. Illinois Central 
R, R. Co.y 113 111. 156, was a suit to prevent one railroad from 
crossing the tracks of another. It was held that under the right of 
eminent domain one railroad company may build its track across the 



REAL PROPERTY 219 

tracks of another company, and the fact that one company has 
aheady acquired, by mutual agreement, a strip of land for building 
two tracks across the other company's tracks will not prevent the 
former from building two additional tracks under the right of 
eminent domain where the increased business of said company 
demands the additional tracks. The fact that it will produce an 
obstruction and an inconvenience to the company whose road is 
sought to be crossed is no reason for enjoining the proceeding to 
condemn, as all the damages caused thereby, when ascertained, 
will have to be paid, and it will be presumed they will be fully 
awarded. The same is true where the property of individuals is 
sought to be condemned for railroad or other public purposes. 

ESTATES FOR LIFE 

Defined. An estate for life is one which is to continue 
during the Ufe or lives of certain people but no longer. 

An estate to a wife during her life is a common limita- 
tion in wills. 

Clark may give a life estate to his son and the fee simple 
estate to his grandson. 

Emblements. The right of the tenant, after his tenancy 
is ended, to take the crops that he has planted is known as 
the right to emblements. This right usually, but not 
always, arises where the tenancy is for an uncertain 
period, such as for life. 

If a tenant plants his crops and is put off the land before 
his term is ended without any fault on his part he may 
recover the crops or their value. Of course, if the tenant 
is put off because of his own wrongful act he is not allowed 
to recover damages. Also, a party who terminates the 
lease is not entitled to the fruit of his labor. Thus, a 
woman was given land to keep as long as she remained a 
widow. After she planted the crops she was married. She 
ended the tenancy by her own act and she was not entitled 
to the harvest. 



220 REAL PROPERTY 

If a tenant is entitled to emblements and dies his 
representatives are entitled to them. 

Waste. A tenant for life is prohibited from committing 
waste. Waste is anything done to the permanent injury 
of the property. 

The life tenant may cut down trees for repairing build- 
ings and fences and for fuel but not to sell. He cannot 
usually cut down either shade trees or young trees but 
they may be cut down to make a clearing for the cultiva- 
tion of crops. 

The tenant cannot open new mines nor dig new clay 
pits but may work old ones. 

Lenfers vs. Henke, 73 111. 405, was a suit for the assignment of 
dower in certain mineral lands on which mines had been opened 
after the death of the complainant's husband. The estate of dower 
is a life estate and it was held that although a life tenant cannot 
open new mines, a widow may have dower in mines opened by her 
husband or by his heirs prior tt> the assignment of dower and she 
may work the mines and construct new approaches thereto without 
being guilty of waste. 

Insurance and repair. As a general rule the tenant must 
keep the property insured and must keep it in good repair. 

ESTATE FOR YEARS 

In general. An estate for years is a lease for a definite 
length of time. 

An estate for years may be for a week, a month, a year^ 
or a number of years. 

The parties involved in an estate for years are known as 
landlord and tenant — the landlord is the owner and the 
tenant the one who pays the rent. 

Estates for years are based upon contracts. Al- 
though they are generally created by express contract, 



REAL PROPERTY 221 

under certain conditions there may be an implied 
tenancy. 

In Oakes vs. OakeSj 16 111. 106, there was no evidence of an 
express contract for rent, nor was there any evidence that the 
tenant was a trespasser or intruder upon the land, or that he in 
any way held it against the will of the owner, and there was no 
agreement that the tenant was to enjoy the land without rent. 
Under such circumstances it was held that the law will infer an 
implied agreement to pay a reasonable rent for the premises. 

In Feeley vs, ThewUsy 25 111. App. 582, the court held that an 
agreement by which an owner of land, allowed the occupant to sow 
rye on the premises, implies an agreement that he should hold the 
land until he could harvest it and creates the relation of landlord 
and tenant. 

Leases. The contract that establishes the relationship 
of landlord and tenant, which relationship is an estate for 
years, is called a lease. 

By the execution of a written lease the Statute of 
Frauds is complied with satisfactorily, in those cases 
in which a writing is required. 

Lake vs. Campbell j 18 111. 106, held that a lease does not need a 
seal, nor acknowledgment to give it validity between the parties, 
as is required in the case of a deed of conveyance. 

A lease for a year to begin in the future requires a 
writing, but a lease for a year to begin at once does not. 

In Bull vs. Griswoldj 19 111. 631, the plaintiff and defendant made 
an oral agreement whereby the plaintiff was to occupy the premises 
not longer than one year. Held, this was a valid lease of the land. 

Illegal leases. When property is leased for illegal 
purposes the contract is void and no rent can be collected. 
One of the common examples of this, is letting a building 
for gambling purposes. 



222 REAL PROPERTY 

Covenants. These are express and implied covenants. 

There is no Umit to the number of express covenants 
that may be put in the lease. A common one is for the 
tenant to keep the building in repair. 

Under this covenant if the party promises to keep it in 
repair and to surrender it in good condition at the end of 
the period he must rebuild if it burns down, even though 
it burned without his fault. The destruction of the 
building does not terminate the lease. 

Ely vs. Eli/y 80 111. 532, was an action by a tenant to recover the 
benefit of fire insurance on property which the owner had insured 
and which was destroyed by fire while the tenant was in possession. 
By the terms of the lease the tenant was required to keep the prem- 
ises in repair and surrender them to the owner in as good condition 
as they were when the tenant entered under the lease. After the 
fire the tenant put up a new and better building at his own expense 
and brought suit to recover the insurance which had been paid to 
the owner. Held, that the tenant should have insured his interest 
as did the lessor, and that he could not complain that the lessor 
ultimately got the benefit of the new building put up by him on the 
lessor's lot. 

The following covenants are implied in leases if there 
are no express covenants : 

1. Quiet enjoyment, 

2. That the tenant will pay rent, 

3. Against waste. (See p. 220.) 

The tenant may sublet unless the lease expressly pro- 
hibits. By subletting is meant leasing a part of the 
premises to another. Ryman rents a house from Ballanger 
and then makes a lease to half of the house to Roy 
Morrison. This is subletting. If he gave the lease to 
Morrison for all the property and Morrison took Ryman^s 
rights and liabilities there would not be a subleasing but 
an assignment of the lease. 



REAL PROPERTY 223 

Recovering possession. At Common Law the landlord 
had the right to regain his property by force but this is 
not permitted in Illinois. The landlord may recover 
possession only by appealing to the courts. 

In Doty vs. Burdick, 83 111. 473, a woman gained possession 
of a house by climbing in through a window after the house became 
vacant. The plaintiff then leased the premises. Then the tenant 
paid rent to another party who claimed the property. The plaintiff 
then ordered the tenant out and placed a sewing machine in the 
house. On the same day another purchaser came with household 
goods and demanded admission and forced the door open and re- 
moved the woman with force into the street together with her sewing 
machine. The court held that even though the plaintiff was wrong- 
fully in possession she was entitled to the place until put out by a 
proper action at law. 

THE ESTATE BY MARRIAGE 

Dower. At the death of either husband or wife, the 
surviving party is entitled to a life interest in one third 
of all the real estate held at any time during their 
marriage. 

In Morse vs, Thorselly 78 111. 600, a widow sought to have dower 
assigned to her out of a piece of property which her husband, in his 
lifetime, had contracted to purchase but had sold to another party 
before making full payment and getting a deed. Held, that such an 
interest as he had under his contract to purchase was not such an 
estate as would entitle his widow to dower. 

Until the death of the other party there is no estate of 
dower, only the right of dower. 

In Virgin vs. Virgin, 189 111. 144, the court said: **The wife 
whose husband is living has a mere inchoate right of dower in his 
lands, — an expectancy, — which does not vest or become property 



224 REAL PROPERTY 

until it is consummated by the death of husband . . . .Mar- 
riage does not, in this State, vest in the wife the absolute 
right to dower, but as an incident of the marriage she is given 
capacity to acquire the right in the event she shall survive her 
husband." 

When one of the two dies, the survivor is entitled to 
dower immediately. 

In Bonner vs. Peterson, 44111. 253, the city of Chicago condemned 
certain property for the purposes of extending LaSalle street. 
The property has been owned by a husband who died leaving it to 
his heirs. It was held that the widow was entitled to dower in the 
amount paid by the city for property taken in the street extension 
and that she was entitled to be paid as soon as she made demand 
and from the date of her demand she would be entitled to damages 
for failure to pay her dower. But she was held not to be entitled to a 
gross sum as dower because of the uncertainty of determining the 
probability of her life and because there is no provision in the statute 
for payment of a gross sum. She was entitled to be paid annually, a 
sum equal to the interest on one third of the amount paid for the 
condemnation by the city, after deducting taxes on the one third, 
during the remainder of her life. 

How dower may be lost. Dower may be lost if the 
husband and wife both sign the deed that conveys the 
property. 

And it may be lost by fraud if both husband and wife 
attempt to deceive others. However the fraudulent act of 
one does not deprive the other of dower rights. 

McLanahan vs. Griffin, 168 111. 31, which was a suit by a widow 
for assignment of dower in property which her husband had sold 
prior to his death without having his wife join in the deed. The 
husband, when he executed the deed said that he was a '^ single man.^' 
The wife had no knowledge of the false statement, the husband did 
not act as her agent, and it was held that the statement did not 
affect the widow's dower. 



REAL PROPERTY 225 

Dower is lost when there is an agreement between the 
husband or wife, either before or after marriage, that the 
dower shall be barred. 

In Earth vs. Lines, 118 111. 374, a couple who were about to get 
married drew up an agreement that each was to have the exclusive 
use of their own property and that neither should acquire any 
interest in the property of the other by virtue of marriage. Both 
parties owned considerable property when they were married and 
the husband, at the time of his death, owned nearly a thousand 
acres of land. The widow brought a suit for assignment of dower in 
this property, but the court held that the agreement made before 
their marriage barred her right to dower. 

THE RIGHT OF HOMESTEAD 

Homestead estates. Every householder having a family 
is allowed an estate of homestead to the extent of $1,000 
in real property owned or rightly possessed and occupied 
by him as a residence. This can not be taken away from 
him to pay his debts, except taxes and assessments unless 
he fails to pay for it when he buys it. 

In Holnhack vs, Wilson , 159 111. 148, the court said, "we do not 
think it was intended by the legislature to restrict the operation of 
the statute to a married man with a family. A bachelor or a widower 
who occupies a house as the head of a family, on land which he de- 
sires to set apart as a homestead, who has living with him a mother, 
father, sisters or brothers who are dependent upon him for support, 
and where there is a corresponding duty of support resting on him, 
might properly be regarded as a householder having a family.'* 

How homesteads may be lost. The right of homestead 
may be lost by the owner releasing it. No release of this 
right is considered valid in IlHnois unless the words, 
'^including the release and waiver of the right of home- 
stead,'' or similar words, are used. 



226 REAL PROPERTY 

Or it may be lost by the owner abandoning it, as it is 
generally — although not always — necessary that the party 
claiming a homestead actually live in it. 

In Sever vs, LyonSy 170 111. 395, a wife owned one lot on which 
were two dwelling houses and a fraction of an adjoining lot where 
she lived with her husband and children. The entire property with 
the three houses was not worth the amount of the homestead 
exemption. The premises were sold under a judgment against the 
wife and the purchaser tendered her a deed to the property on which 
she resided, but she refused to accept the deed on the ground that 
the homestead exemption covered all the property and that the 
purchaser under the judgment had no right to any of it. Held, that 
the lot on which the wife did not reside and on which were the two 
dwellings which she rented to other parties was not exempt, and that 
only that portion of the entire property could be exempt which the 
wife occupied as a residence. 

Smith vs. Kneer, 203 111. 264, was a suit in which a husband sold 
the homestead. His wife then moved to Ohio and got a divorce. She 
claimed the homestead. The court held she abandoned the home- 
stead by moving to Ohio and could not object to the sale. 

In Cahill vs. Wilson, 62 111. 137, Wilson and his wife moved from 
the premises occupied by them and went to live upon a farm. It 
was held that the removal from the premises constituted an abandon- 
ment of the homestead and the fact that Wilson rented the premises 
was not enough to satisfy the statute requiring actual residence. 

But in Potts vs. Davenport, 79 111. 455, Davenport resided on a 
farm with his family and then moved to Chicago to engage in 
business. He took his family with him but did not intend to reside 
there permanently. He rented the place on his farm but reserved 
two rooms for storing his goods until he should return. While in 
Chicago he rented a house from month to month and exercised no 
political privileges in that city nor in Cook County. Three years 
later he returned and again took up his residence with his family 
on his farm, but in the meantime one of his creditors acquired a lien 
on his farm homestead by a judgment against him for a large 
sum of money. Held, that the removal to Chicago was not an 
abandonment of the homestead estate and that the lien could not 
attach thereto. 



REAL PROPERTY 227 

MORTGAGES 

Definition and explanation. A mortgage is an interest 
in property, given to secure the payment of a debt or other 
obligation. 

There are two kinds of mortgages: 

1. Chattel, (on personal property), 

2. Real estate, (on real property). 

One example will show why many mortgages are given. 
Jacobs wants money. He has property. Harvey agrees to 
lend him $3000 for three years if he will give security, so 
he gives a mortgage on property worth $8,000. This 
mortgage gives the property to Harvey but the title is 
defeated if Jacobs pays the money. If Jacobs does not 
pay the loan the court will sell the property and give Har- 
vey his money, and Jacobs will get only what is left. 

Form of real estate mortgages. A mortgage is in effect 
a deed, with the provision added that it is to be void when 
a certain thing is done. This thing to be done is usually 
the payment of money. 

If its form is that of a deed when it really is a mortgage 
the courts will treat it as a mortgage. When a party gives 
a deed but it is understood that it is to be a mortgage in 
fact, the courts of Illinois treat the ''sale'' as a mortgage. 

In Totten vs. Totten, 294 111. 70, Harry Totten was in straightened 
circumstances and in ill health and was much in debt for the home 
in which he lived with his sister. He had been borrowing money 
from time to time from his uncle, who was a man of means living in 
Washington, D. C, and wrote to him to take up the debt on the 
home. The uncle promised to do so if Totten would send him a deed 
of the property. Accordingly .the deed was executed and delivered. 
When the uncle died his heirs sought to partition the property 
among themselves but the court allowed Totten to redeem the home 
under the same conditions as if the deed had been only a mortgage. 



228 REAL PROPERTY 

Redemption. Strictly speaking if the debt is not paid 
the title passes to the mortgagee. But this harsh rule is 
not favored by courts of equity and they give the mort- 
gagor the right to redeem his property by paying the debt, 
provided he does so before the mortgagee brings suit (known 
as a foreclosure proceeding) by which the equity of redemp- 
tion is cut off. But even after the foreclosure decree the 
mortgagor has fifteen months in which he is allowed to pay 
the money due (plus interest) and recover the property. 

Trust deeds. A trust deed has the same effect as a 
mortgage but brings in a third party who is known as the 
trustee. The trustee holds the trust deed until the debt 
is paid, and if it is not paid he has power to foreclose the 
trust deed in behalf of the party to whom the money 
should have been paid. 

QUESTIONS ON REAL PROPERTY 

1. Define real property. 

2. What is an abstract? 

3. What are two important methods of transferring title to real 

estate? 

4. What is a mortgage? 

5. Define a deed. 

6. Name the two kinds of deeds. 

7. Name the six requisites of a deed. 

8. Who is a grantor? A grantee? 

9. Who is a mortgagor? A mortgagee? 

10. What are the '' operative words" in a warranty deed? In a 

quit-claim deed? In a mortgage? 

11. Why was not signing required at Common Law? 

12. Herbert M. Babson signed a deed as, '' Herbert Babson.'^ Is 

the deed valid? What case answers this? 

13. Suppose the parties neglected to put a seal on it. Would it 

be valid? 

14. Hinsbow decided to give his farm to his son and mailed the latter 

a deed. The son recorded the deed. Has the title passed? 



REAL PROPERTY 



229 



15. Hempstead gave his son a deed to a house and lot but the 

son refused to accept it. Has the title passed? 

16. Dixon made out two deeds to his property which he expected 

to dehver to his children. On his way to deliver them he 
was suddenly killed. The children had stated they would 
accept them. Has the title passed? 

17. What is an acknowledgment? 

18. Is it necessary to have a deed acknowledged to have it valid? 

19. What did the court decide in Clark vs, Wilson? 

20. Is a date necessary in a deed? What is said about giving a 

date? 

21. What is a quit-claim deed? 

22. How does it differ from a warranty deed? 

23. Jackson gave a quit-claim deed to property to Weston for 

$5,000. Later Weston learned Jackson never had any title 
or interest in the property. Could he recover his $5,000? 

24. What implied covenants are in every warranty deed in Illinois? 

25. Name the three important estates in property. 

26. If no estate is specified which one is presumed? 

27. What is an estate in fee? 

28. Name four ways in which a man may lose his real property. 

29. What is the right of eminent domain? 

30. What do the Constitutions of the United States and the State 

of Illinois provide as to compensation for property taken 
for public use? 

31. The Baldwin Improvement Co. wanted ground for its plant 

which manufactured paving blocks. Can it secure the 
ground under the right of eminent domain? 

32. A railroad company needed several lots for a station. Could 

it secure them under the right of eminent domain? 

33. What is an estate for life? 

34. Harker after renting his house and lot to Pond for a year 

deeded the place to the American Legion, with the provision 
that Harker's son should have the right to it until he died. 
What estate did Pond have? What estate had the Legion? 
What estate had Harker's son? 

35. Define emblements. 

36. C. G. Craig was given land by his father to hold as long as 

he would live at home. In July he left home without good 
cause. Was he entitled to the corn which he planted in the 
Spring? 



230 REAL PROPERTY 

37. Suppose his father put him off the place without just cause. 

Could the son recover emblements? 

38. What is waste? 

39. May a tenant for life take coal out of an open mine? 

40. May the tenant for life sink a gas well and take the gas? 

41. Is a tenant for life allowed to sell clay that is in a pit which 

was opened ten years before he secured possession of the 
premises? 

42. Who is a landlord? 

43. Who is a tenant? 

44. What kind of contract was there in the case of Oakes vs, Oakesf 

45. What is the contract that establishes the relationship of land- 

lord and tenant called? 

46. N. C. Adair made an oral agreement with S. W. Bennett where- 

by he was to live in the latter' s house for six months. Is this 
contract valid? 

47. What two kinds of covenants are there in leases? 

48. Murry rented a house from Dales for a year. At the end of 

six months he rented half of the house to Perry. Has he the 
legal right to do this without. Dales' permission? 

49. Berg rented a house to Hendrick who refused to pay rent or 

move. Berg went into the house and carefully removed 
everything, placing the household goods in a safe place. 
According to the law, was Berg right or wrong? 

50. What is dower? 

51. When is a husband or wife entitled to dower? 

52. C. B. Jefferson sells his real estate to a stranger. Jefferson says 

he is unmarried. His wife knew the stranger was deceived 
but said nothing. When he died could his wife recover dower? 
Give reason. 

53. A couple about to be married made a written agreement where- 

by neither was to receive any interest in the property the 
other might have. Later the man changed his mind and 
told his wife he would not be bound by the contract. At 
her death he sued to recover the dower. Is he entitled to 
dower? 

54. Conrad who is supporting an invalid brother is living in a 

property worth $850. He owes $2000. Can this property 
be sold to pay the $850 indebtedness? Give reason. 

55. What is the right of homestead? 

56. What did the Court decide in the case Smith vs. Kneerf 



I 



REAL PROPERTY 231 

57. Bender lived in a small house in Aurora. He left this for six 

months to visit a brother. Did he lose his right of homestead? 

58. Define a mortgage? 

59. What is a chattel mortgage? 

60. What is a real estate mortgage? 

61. Lloyd gave Hays a deed. It was given to secure the payment 

of a debt of $600. Cite a case in the text which decides 
whether this will be treated as a deed or a mortgage. 

62. In what way does a trust deed differ from a mortgage? 

63. Edward Roe had a written agreement with Dr. Markham to 

sell him 160 acres of land but neither party had signed it. 
Is the agreement binding? 



I 



VOCABULARY 



VOCABULARY 



These definitions are given to explain the text and not 
to give a meaning to fit all cases in which the word may be 
used. Words explained in the text are not defined. 



Abrogate: to annul a contract 
or a law. 

Abrogation: annulling a con- 
tract or a law. 

Absorb: swallow up. 

Abstract of Title: a brief state- 
ment of the transactions which 
affect the title to real property. 

Acceptance: receiving some- 
thing with the intention of 
keeping it. 

Accomplice: one who aids an- 
other to commit a crime. 

Accord: see accord and satis- 
faction. 

Accord and Satisfaction: an 
agreement or settlement after 
which no further action can 
be brought by either party. 

Accounting: making a complete 
report of all assets and habil- 
ities. 

Acquiscence: agreeing silently; 
not protesting. 

Action: a lawsuit. 

Actual Annexation: real union 
of two things, usually of per- 
sonal property to real prop- 
erty; fastening by spikes, 



bolts, screws or other means; 
joining; see constructive an- 
nexation. 

Addition: lands near towns or 
cities which are added to and 
which become part of such 
towns or cities. 

Adjudged: decided. 

Adjust: to make right. 

Administer: to manage. 

Administrator: a man appointed 
by court to manage the estate 
of a person who has died; see 
executor. 

Administratrix: a woman ap- 
pointed by court to manage 
the estate of a person who 
has died; see executrix. 

Admiralty: matters pertaining 
to the sea. 

Affirm: to confirm some act. 

Affirmation: a declaration that 
a thing is true or untrue. 
Quakers and others who ob- 
ject to giving an oath, affirm 
or make affirmation of facts. 

Agent: one who is authorized 
to do something for and in the 
name of another. 

Allege: to assert. 



235 



236 



VOCABULARY 



Alter: to change the terms of 
a contract or other instru- 
ment. 

Alteration: a change in the 
terms of a contract or other 
instrument. 

Alternative: a choice of doing 
one of two things; that which 
one may do in preference to 
another act. 

Annexation: to fasten one thing 
to another; see actual an- 
nexation and constructive an- 
nexation. 

Annul: to make void; to make 
of no effect. 

Apparent: what appears at 
first glance to be true. 

Appeal: to take a case from a 
lower to a higher Court or 
superior authority. 

Appellate Court: a Court which 
hears a case appealed from a 
lower Court; in Illinois the 
four Courts lower than the 
Supreme Court but next 
higher above the Circuit 
Courts. 

Apprehension: the capture of a 
person charged with a crime. 

Appropriate: to grant mone}^ 
for a particular purpose. 

Arbitrary: without restraint or 
regulation of any authority or 
rule; despotic. 

Artifice: a trick. 

Assessment: an amount levied 
to pay for an improvement; 
assessments are levied for 
pavements, sewers and water 
mains; an amount levied to 



pay for benefits received by 
members of a corporation. 

Assets: all property that can be 
used to pay debts. 

Assign: to transfer one's right, 
title or interest in property to 
another. 

Assignment: the transfer of 
one's right, title or interest in 
property to another. 

Assume: take for granted. 

Authentic: genuine. 

Authorize: to instruct; to give 
right to act. 

Avoid: make void; evade; an- 
nul; make of no effect. 

Axiom : a settled principle of law. 

B 

Bankrupt: one whom the 
United States Court has dis- 
charged from his obligations as 
being unable to pay his debts. 

Bankruptcy: the state of being 
a bankrupt. 

Bill: (1) the statement of a 
cause of action in Chancery 
written by the party start- 
ing the suit; (2) a draft; a 
bill of exchange. 

Bounty: compensation paid to 
a class of persons, as bounty 
given during the Civil War 
to all who enlisted in army at 
a certain time. 

Breach: the violation of obliga- 
tion. 

Broker: one who buys and sells 
goods for another, as a real 
estate agent who buys and 
sells real estate. 



VOCABULARY 



237 



Burden of Proof: the duty of 
proving the point in dispute. 



Cancel: annul; revoke. 

Cancellation: the act of annul- 
ing or striking out. 

Capacity: the qualification or 
power of a person to do an 
act. 

Casualty: accident. 

Chancellor: one who presides 
over a' Court of Chancery; 
formerly an assistant to the 
King of England. 

Charge: a claim against certain 
property. 

Charter: a document which 
gives rights or privileges; as a 
charter of a corporation. 

Chattel: personal property. 

Civil Law: that which deals 
with private property and 
private rights; all laws that 
do not deal with crimes are 
civil laws. 

Combination: an association 
organized for a particular 
purpose. 

Commercial Law: that which 
deals with business transac- 
tions. 

Commission: fee given or re- 
ceived for making a sale for 
another. 

Commission Man: a party 
whose business it is to sell 
goods for others and who 
charges for such services. 

Common Law: that system of 
legal principles that grew out 



of the customs and usages 
common to all of England. 

Communicate: inform. 

Compensation: pay; reward. 

Competent: legal fitness to do 
some act. 

Complainant: one who starts 
the suit in Chancery. 

Compromise : the settlement 
agreed upon by disputing 
parties. 

Compulsion: forcing one to do 
something against his wishes. 

Conclusive: decisive; final. 

Concurrent: equal in authority. 

Condemn: disapprove; to say 
that property is to be taken 
for public use, as under the 
right of eminent domain. 

Condemnation: the act of con- 
demning. 

Condition: a provision in an 
instrument that a certain 
thing shall depend upon the 
happening or not happening 
of another thing; a state of 
affairs. 

Confidential: trustworthy. 

Conformity: corresponding in 
form or manner. 

Consequently: as a result. 

Conservator: one appointed to 
attend to the estate of an- 
other while he is living, as 
one who looks after a lunatic. 

Consideration: the money or 
other inducement which 
prompts the making of a 
contract. 

Consignee: the one to whom 
goods are sent. 



238 



VOCABULARY 



Consignor: the one who sends 
goods to another. 

Consistent: not contrary to 
some previous act or conduct 
or words. 

Constitute: to establish; to 
form. 

Constitution: the fundamental 
law of a State or Country. 

Constitutionahty: being con- 
sistent with the provisions of 
-a Constitution. 

Construction of Law : the mean- 
ing the law puts to a disputed 
question. 

Constructive Annexation: an- 
nexation in the eyes of the law 
which is not actual annexa- 
tion; a key in a door is not 
actually annexed but it is 
constructively annexed, it is 
annexation in the eyes of the 
law. 

Consummate: to complete. 

Consummation: the completion 
of a contract or agreement. 

Contemplate: consider. 

Contribution: payment by a 
person of his share of a debt. 

Conveyance: transfer of prop- 
erty by one to another. 

Conviction: being found guilty 
of wrongdoing. 

Co-Partner: a person who is a 
member of a partnership. 

Corporate Powers: powers of a 
corporation. 

Corporation: a body of persons 
united by law and given the 
power to act for various pur- 
poses as an individual; see 



domestic corporation and for- 
eign corporation. 

Counterfeit: an imitation ; some- 
thing false resembUng the true. 

Court Martial: military or 
naval Court. 

Covenant: agree; promise; 
agreement. 

Creditor: one to whom another 
owes money. 

Criminal Law: the law which 
deals with crimes. 

Custody: the possession of a 
person or thing, it involves 
the care of the person or thing. 

D 

Damages: amount sought be- 
cause of an injury. 

Days of Grace: days allowed 
after negotiable instruments 
are due before they must be 
paid; there are no days of 
grace allowed in Illinois. 

Debtor: one who owes money. 

Deceased: dead. 

Deceit: a trick; a falsehood. 

Deceive: to fool. 

Decision: a judgment of a 
court. 

Decree: the decision of a Court 
of Equity. 

Defendant: the party against 
whom a suit is brought, either 
in Chancery or in Common 
Law actions. 

Defraud: to cheat. 

Delegate: to give another the 
power and right to act. 

Demand: a command that a 
person do a certain thing. 



VOCABULARY 



239 



Deposit: intrust to another; 
give to another for safe keep- 
ing. 

Descend: to give from one gen- 
eration to another, as prop- 
erty given from father to son. 

Devise: to give property by will. 

DiUgence: attention, careful- 
ness. 

Director: a person selected to 
manage the affairs of a cor- 
poration. 

Disability: lack of legal capacity. 

Disaffirm: to refuse to abide by 
a contract. 

Discharge: release or free from 
a debt or other obligation. 

Dishonor: to neglect or refuse 
to pay a negotiable instru- 
ment when it is due. 

Dissolution: the breaking up of 
a partnership or a corpora- 
tion. 

Dividend: a share of the profits 
of a firm or corporation. 

Domestic Corporation: a cor- 
poration incorporated in this 
State; see foreign corporation. 

Due: owing. 

E 

Eccentricity: peculiarity of 

habits or manner. 
Ejectment: a suit to recover 

land. 
Election: (in contracts) choice. 
Embezzle: to wrongfully use 

money or property intrusted 

to a person's care. 
Enforceable: capable of being 

legally carried into effect. 



Equity: that system of juris- 
prudence exercised by the 
High Court of Chancery in 
England. 

Equity of Redemption: the 
right which the mortgagee has 
of redeeming his property 
after it is once lost. 

Essential: necessary, or in- 
dispensable; a thing necessary 
or indispensable. 

Evidence: documents or oral 
testimony tending to prove or 
disprove the proposition under 
consideration. 

Evolve: develop. 

Examiner: lawyer who passes 
on questions of title to real 
property. 

Exception: a thing contrary to 
the general rule. 

Exclusive: tending to exclude or 
shut out. 

Executed: performed. 

Executive Committee: a com- 
mittee selected to carry on 
some administrative work. 

Executor: man appointed by a 
will to care for the estate of 
the deceased. 

Executory: not performed; not 
carried out. 

Executrix: woman appointed 
by a will to care for the estate 
of the deceased. 

Exempt: free; clear. 

Exemption: free of some duty or 
obligation. 

Expectancy: that which is ex- 
pected or waited for, as an 
estate in expectancy. 



240 



VOCABULARY 



Expulsion: the act of putting 

out. 
Extraneous: foreign; coming 

from without. 



Fiduciary: founded upon trust 
or confidence. 

File: to place on record in a pub- 
lic office, as placing a deed on 
record in the Recorder's office 
at the Court House. 

Firm: a partnership; a com- 
pany; a business house. 

Foreclosure: to cut off the 
equity of redemption. 

Foreign: belonging to another 
State or Nation. 

Foreign Corporation: one incor- 
porated in another State or 
Nation. 

Forfeiture: loss for some neglect 
or misdeed. 

Forge: to wrongfully make or 
alter a writing. 

Forger: one who wrongfully 
makes or alters a writing. 

Formality: a regular process; 
form without substance. 

Franchise: a special privilege 
granted by the government, 
as the privilege given com- 
panies to run street cars 
through the streets. 

Fraud: deceit. 

Fraudulent: obtained by trick 
or deceit. 

Fugitive: a wrongdoer who flees 
from punishment. 

Fundamental: foundation or 
basis. 



G 

Gaming Contract: an agree- 
ment based upon a gambling 
transaction, where one party 
is to lose and the other win by 
chance. 

Grantee: person who receives 
real property by deed. 

Grantor: person who disposes 
of real property by deed. 

Gross Receipts: entire earn- 
ings. 

Guardian: a person who has the 
care of another. 

H 

Heir : one who is entitled to the 

property of another when the 

latter dies. 
Holder: the person legally in 

possession of a negotiable 

instrument. 



Identify: to prove a thing the 
same as is claimed. 

Identity: absolute likeness. 

Illicit: unlawful. 

Impeachment: discrediting a 
public official for his ac- 
tions. 

Imposition: trick; fraud. 

Inchoate: incomplete. 

Incompetent: not able; wanting 
authority; not having the le- 
gal qualifications. 

Incorporate: to unite persons 
into a corporation; to form a 
corporation. 

Incorporation: the formation of 
a corporation. 



VOCABULARY 



241 



Incumbrance: an interest or 
right in property that is pos- 
sessed by one not owning the 
property. 

Incur: to become Hable for an 
obUgation; to assume a Ha- 
bihty. 

Indefeasible: cannot be de- 
feated nor made void, as 
an estate which is indefeasi- 
ble. 

Indorsee: the person to whom a 
negotiable instrument is as- 
signed. 

Indorser : the person who signs 
his name on the back of a 
negotiable instrument. 

Induce: influence; cause. 

Inherit: to get property from a 
relative at his death. 

Insolvent: unable to pay debts. 

Installment: payment of a part 
of a debt. 

Instrument: any written con- 
tract; any writing. 

Insure: to secure a person 
against a loss, as against 
fire, or against an imperfect 

. title. 

Interest: amount paid for the 
use of money. 

Interpret: to explain the mean- 
ing of. 

Interpretation: an explanation 
of a doubtful provision. 

In Transitu: in transit. 

Investigation: a search. 

Ipso Facto: by the fact itself; 
by the act itself. 

Irresistible Force: absolutely 
uncontrollable, as lightning. 



Joint Note: an instrument by 
which two or more persons 
together are liable. 

Joint and Several Note: an 
instrument by which two or 
more persons are liable not 
only together but also sep- 
arately. 

Judgment: the decision given 
by the Court in a lawsuit. 

Jurisdiction: the authority or 
right of a Court to try a case. 



Landlord: one who has tenants 
under him; the man who keeps 
a hotel. 

Larceny: stealing. 

Law: a rule of action; in nar- 
rower sense, a rule of action 
prescribed by some superior 
authority by which men are 
governed and which they 
must obey. 

Lease: contract bj^ which prop- 
erty is rented. 

Legal Tender: that money 
which Congress has declared 
must be accepted in payment 
of any undisputed debt. 

Legislative: pertaining to legis- 
lation. 

Legislature: the body in the 
State or Nation that makes 
the laws. 

Lessee: the party who pays 
rent to the owner of property 
under a lease. 

Lessor: owner who rents real 
estate under a lease. 



242 



VOCABULARY 



Liability: responsibility. 

License: permission. 

Lien: a claim that one person 
has on the property of an- 
other. 

Lieu: in place of; instead of. 

Livery of seizen: a ceremony in 
which a clod of earth or a 
twig of a tree was delivered 
by the seller to the buyer as a 
symbol to show that property 
was transferred. 

Lobbying: soliciting members of 
a legislative body to vote for 
a particular bill. 

Log Rolling: trading votes; the 
system that has grown up of 
one man voting for another's 
bill in the legislatures in re- 
turn for a like favor. 

M 

Malpractice: wrongful conduct 
of a case. 

Master-in-Chancery: assistant 
to Circuit Judge. 

Maturity: the time when a 
negotiable instrument be- 
comes due. 

Maxim: a settled principle of 
law. 

Mechanical Act: anything done 
without the exercise of dis- 
cretion. 

Memorandum: brief record. 

Merge: to absorb. 

Merger: the absorption of a 
lesser thing by the greater. 

Ministerial: that which anyone 
can do without exercising his 
discretion. 



Minority: while under age; 
while yet a minor. 

Minute-Book: a book in which 
written minutes are entered. 

Misdemeanor: a lesser criminal 
offense. 

Misrepresentation: falsely rep- 
resenting a thing. 

Monopoly: exclusive control of 
the sale of an article. 

Mortgagee : one to whom a mort- 
gage is made. 

Mortgagor: one who makes a 
mortgage. 

Mutual Benefit: for the ad- 
vantage of both. 

Mutual Mistake: an error 
made by both parties in 
regard to the same matter. 

N 

Necessary: a thing suitable to a 
person considering his occu- 
pation, wealth, and social 
position; see necessity. 

Necessity: needful; see neces- 
sary. 

Negligence : carelessness. 

Negotiable: capable to being 
transferred legally, so the 
title passes. 

Negotiate: to transfer a bill 
or note; generally, to deal 
with others in business af- 
fairs. 

Non-Payment: neglect or re- 
fusal to pay. 

Notary: a public officer au- 
thorized to administer oaths. 

Notary Public: same as notary. 

Notice: information. 



VOCABULARY 



243 



O 

Obligation: duty. 

Operation of Law: decision 
reached by law without regard 
to the wishes of the parties. 

Opinion: the statement of the 
Court of the reasons for the 
judgment; conclusion of a 
party as distinguished from 
facts known by the party. 

Option: choice. 

Original: first in order; not 
copied. 

Original Parties: the primary 
parties; the parties who make 
a contract. 

Overdue: past the time of pay- 
ment. 

P 

Pardner : corruption of the word 
X)artner. 

Partner: a member of a firm. 

Patent: a privilege secured by 
authority of the United States 
whereby an article cannot be 
duplicated without the con- 
sent of the one having the 
privilege. 

Pawnbroker: a person who 
lends money on personal prop- 
erty. 

Perjury: swearing falsely under 
oath. 

Perpetrate: to be guilty of. 

Personal Representative: exec- 
utor or administrator of a 
deceased person's estate. 

Personalty: personal property. 

Plaintiff: party who commences 
the suit in Court. 

Plat: a map. 



Pledge : a thing given as securitj^; 
to give anything as security. 

Political Privileges: advantages 
pertaining to the adminis- 
tration of government, as the 
privilege of voting. 

Possession: having or holding 
property. 

Power of Attorney: an instru- 
ment which gives another the 
right to act for the person 
giving the instrument. 

Precedent: something done 
which serves as a rule for 
things done later. 

Premium: a sum paid for the 
contract of insurance. 

Prerequisite: previously re- 
quired. 

Prescribe: command. 

Presentment: showing a nego- 
tiable instrument to the party 
who is legally bound to pay it. 

Presumption: taking a thing 
for granted before there is a 
certainty as to the matter. 

Prima Facie: the first view; it 
holds good if there is no evi- 
dence to show the contrary. 

Primary Parties: the parties 
who make a contract; the 
original parties to a contract. 

Principal: the party who em- 
ploys an agent; money lent at 
interest. 

Probate: proof that a will is 
genuine. 

Proceedings: steps taken in the 
trial of a law suit. 

Proprietor: the owner of a 
business. 



244 



VOCABULARY 



Propriety: fitness. 

Prosecution: carrying on an 
enterprise; used especially in 
connection with law suits 
against criminals. 

Prospective: expected; possible. 

Protest: a notice under seal 
sent to parties liable on a 
negotiable instrument in- 
forming them of their liability 
because it was not paid. 

Proxy: a written instrument 
which gives one person power 
to act for another. 

Puffing: praising one's property 
in exaggerated terms. 

Q 

Qualified: limited. 

Qualify: to limit the terms of an 

offer. 

R 

Ratify: to agree that the act of 
another is to be the act of 
the person agreeing; to agree 
after your disability is re- 
moved that an act done while 
under the disability shall be 
your act. 

Realty: real property as dis- 
tinguished from personal 
property. 

Receipt : written acknowledg- 
ment that money has been 
paid. 

Recognizance: the giving of a 
bond as a guarantee that a 
certain thing will, or will not, 
be done; the giving of a bond 
that a person will appear in 
court at a certain time. 



P^ecompense : compensation, 

Record: to register; an account. 

Recourse: resort to; see With- 
out Recourse. 

Redeem: to recover; as to re- 
cover property pawned at a 
pawnbroker's by paying 
money borrowed on it, or to 
recover property lost by giv- 
ing a mortgage and failing to 
pay money due on it. 

Referee: a person appointed to 
settle disputes. 

Re-Incorporate: to incorporate 
a second time. 

Release: giving up a claim or 
right. 

Relinquish: to give up; to quit; 
to surrender a right or claim. 

Repeal: to annul. 

Repudiate: to refuse to pay; to 
deny any responsibility. 

Requisites: things needed to 
make an instrument valid. 

Rescind: annul; cancel. 

Restraint of Trade: limiting 
business. 

Restrictive: limited. 

Restrictive Statute: a law that 
limits. 

Revocation: recall of author- 
ity, as recalling or taking 
away the authority or power 
of an agent. 

S 

Scope: intent. 

Secondary Parties: not original 
parties to a contract but those 
who received rights or liabil- 
ities later. 



VOCABULARY 



245 



Security: something given to 
make a matter sure or cer- 
tain; an amount guaranteed 
to protect the court or par- 
ties. 

Seisen: possession of real prop- 
erty with a (Tlaim of title. 

Session: the time when a court 
sits to transact business; 
term. 

Several Note: separate; one on 
which the signers are liable 
separately. 

Shipper: the party who has 
goods sent from one place to 
another. 

Signify: means; denotes. 

Sovereign: independent. 

Specialty: a contract under 
seal. 

Specific Performance : the carry- 
ing out of a contract accord- 
ing to its exact terms. 

Speculative: risky. 

Statute: a law made by a legis- 
lative body; it is used in 
contradistinction to Common 
Law; see Common Law. 

Stipulated: agreed. 

Stipulation: a material provi- 
sion in a contract. 

Sub-Agent: a party appointed 
by an agent to do some act 
relating to the agency. 

Subdivision: a part of a plot 
of land made by dividing the 
plot. 

Subject Matter: the thing in 
dispute. 

Subscription: the act where- 
by a party agrees to give 



money for a particular pur- 
pose. 

Successor: one who follows 
another. 

Surrender: give up. 

Suspension: a temporary with- 
holding or stopping of a right. 

Suspicious: doubtful; mistrust- 
ing. 

Sutler: a man who sells pro- 
visions to a camp. 



Tainted: impure; corrupt. 

Tangible Property: any kind of 
property which may be felt or 
touched. 

Taxes: an amount imposed by 
the government to pay the 
expenses of carrying on the 
government. 

Technical: that which is ap- 
propriate to an art; formal. 

Tenancy: the estate held by a 
tenant. 

Terminate : end. 

Testator: man who makes a 
will. 

Testatrix: woman who makes 
a will. 

Testimony: the statement of a 
witness under oath. 

Title: the means by which a 
party gets legal possession of 
property. 

Transferable: deliverable from 
one party to another. 

Trespasser: a person who in- 
jures another, or another's 
property, by doing an un- 
lawful act. 



246 



VOCABULARY 



Trust: a right in property held 
by one person for the benefit 
of another. 

Trust Agreement: a contract 
whereby goods are to be con- 
trolled by a monopoly; it is 
illegal. 

Trust Company: a company 
formed* to handle property for 
other people; it is valid. 

U 

Unconditional: without quali- 
fication; absolute. 

Unenforceable: not capable of 
being legally carried into effect. 

Unethical: not right. 



Vague: uncertain; not specific. 
Valid: good; binding in law. 
Variation : a change. 
Vendee : the buyer. 
Vendor: the seller. 
Vest: to take effect; to have 
right of possession. 



Void: not binding in law; of no 
legal effect. 

Voidable : binding on one party 
but binding or not bind- 
ing on the other, at the 
latter's option. 

w' 

Wager: a bet. 

Waiver: giving up, or refusing 
to accept a right. 

Warehouse : a place where goods 
are stored. 

Warehouseman: a person who 
receives goods to be stored in 
his warehouse. 

Warranty: security; a state- 
ment by a party which renders 
him liable if things do not turn 
out as represented. 

Will: an instrument which dis- 
poses of a person's property 
after his death. 

Without Recourse: words which 
when added to an indorse- 
ment relieve the indorser of 
much liability. 



TABLE OF CASES 



I 



TABLE OF CASES 



Adams vs. King, 162 

Almy vs. Hunt, 217 

American Express Co. vs. Per- 
kins, 137 

American Hominy Co. vs. Milli- 
kin Nat'l Bank, 93 

American Merchants' Union Ex- 
press Co. vs. Milk, 142 

American Merchants' Union Ex- 
press Co. vs. Schier, 141 

Anderson vs. Alton National 
Bank, 88 

Andrews vs. Kingsbury, 56 

Arnold vs. Illinois Central R. R. 
Co., 145 

Arter vs. Byington, 53 

Askew vs. Springer, 185 

B 

Bailey vs. Pardridge, 71 
Baker vs. McClurg, 105 
Balkwill vs. Bridge wood Wood 

Finishing Co., 161 
Balton vs. Huling, 33 
Barker vs. Keown, 29 
Barth vs. Lines, 225 
Beach vs. First M. E. Church, 

33 
Beach vs. Miller, 216 
Beatty vs. Western College, 58, 

160 
Bedford vs. Bedford, 104 
Beers vs. Williams, 109 
Bickford vs. First Nat'l Bank, 91 



Bishop vs. Busse, 72 

Bissell vs. Pierce, 189 

Black vs. Wabash, St. Louis and 

Pacific R. R. Co., 41 
Blake vs. Sweeting, 187 
Bloomington vs. Latham, 218 
Board of Trade vs. Nelson, 196 
Bolton vs. Huling, 33 
Bonney vs. Stoughton, 75 
Bonner vs. Peterson, 224 
Bonney vs. Perham, 88 
Boscowitz vs. Adams Express 

Co., 132 
Bostwick vs. Williams, 217 
Bradley vs. Irish, 50 
Brady vs. Cole, 45 
Brandon vs. Brown, 25 
Brown vs. Schintz, 165 
Bruffett vs. The Great Western 

R. R. of 1859, 205 
Buchanan vs. International 

Bank, 215 
Bull vs. Griswold, 221 
Bullock vs. Adair, 129 
Burgess vs. Badger, 185 
Burwell vs. Orr, 175 

C 

Cahill vs. Wilson, 226 
Campbell vs. Brunk, 202 
Campbell vs. Freeman, 48 
Campbell vs. Potter, 69 
Carson vs. Clark, 62 
Case vs. Ayers, 43 
Chadsey vs. McCreery, 91 



249 



250 



TABLE OF CASES 



Chandler vs. Northern Cross 

R. R. Co., 202 
Chicago and Alton R. R. Co. 

vs. Michie, 144 
Chicago and Alton R. R. Co. 

vs. Mulford, 180 
Chicago and Alton R. R. Co. 

vs. Pillsbury, 148 
Chicago and Alton R. R. Co. 

vs. Shea, 137 
Chicago and Northwestern Ry. 

Co. vs. Chapman, 140 
Chicago and Northwestern Ry. 

Co. vs. Williams, 145 
Chicago and Western Indiana 

R. R. Co. vs. Illinois Central 

R. R., 218 
Chicago, Burlington and Quincy 

R. R. Co. vs. Parks, 146 
Chicago, Rock Island and Pacific 

R. R. Co. vs. Boyce, 151 
Chicago, Rock Island and Pacific 

R. R. Co. vs. Hamler, 144 
City of Bloomington vs. Latham, 

218 
City of Decatur vs. Vermillion, 

62 
Chytraus vs. Smith, 34 
Clark vs. Burnside, 103 
Clark vs. Wilson, 214 
Clay vs. Hammond, 29 
Cloyd vs. Steiger, 125 
Cogel vs. Kniseley, 106 
Coggs vs. Bernard, 125 
Cole vs. Pennoyer, 24 
Collins Ice Cream Co. vs. 

Stephens, 72 
Columbus Packing Co. vs. 

State, 10 
Commercial Mutual Accident 

Co. vs. Bates, 46 



Commercial National Bank vs. 

Waggeman, 169, 175 
Connet vs. City of Chicago, 8() 
Corcoran vs. White. 31 
County of Montgomery vs. 

Robinson, 38 
Craft vs. McConoughy, 54, 182 
Crichfield vs. Bermudez Asphalt 

Paving Co., 55 
Crocker vs. Manley, 42 

D 

Dartmouth College vs. W^ood- 

ward, 205 
Dady vs. Condit, 45 
Davidson vs. Young, 25 
Davis vs. Hamlin, 90 
Dean vs. Walker, 76 
Decatur vs. Vermillion, 62 
Decatur National Bank vs. 

Murphy, 165 
Delano vs. Case, 44 
Distilling and Cattle Feeding 

Co. vs. People, 206 
Doe vs. Braden, 4 
Doremus vs. Hennessy, 95 
Dorsey vs. Wolcott, 48 
Doty vs. Burdick, 223 
Doyle vs. Bailey, 182 
Drake vs. Latham, 41 
Drennan vs. Bunn, 170 
Dupee vs. Blake, 122 

E 

Eastman vs. Littlefield, 215 
Edgerton vs. Preston, 183 
Edwards vs Tyler, 85 
Ehrler vs. Braun, 175 
Elgin Butter Co. vs. Elgin 

Creamery Co., 199 
Ely vs. Ely, 222 



TABLE OF CASES 



251 



Erie Ry. Co. vs. Wilcox, 139 
Estate of Rapp vs. Phoenix 

Insurance Co., 96 
Evans vs. Edwards, 59 



Farwell vs. Lowther, 64 
Fawcett vs. Osborn, 110 
Feeley vs. Thewlis, 221 
Field vs. Herrick, 24 
First M. E. Church of Chicago 

vs. Dixon, 200 
Follansbee vs. Adams, 115 
Foss vs. Cummings, 54 
Foster vs. Neilson, 4 
Freeport Water Co. vs. City of 

Freeport, 196 
Funk vs. Babbitt, 186 

G 

Galena and Chicago Union R. R. 
Co. vs. Rae, 134 

Garvin vs. Wiswell, 157, 174 

Geary vs. O'Neil, 65 

Geist vs. Pollock, 126 

Gent vs. The Insurance Com- 
pany, 22 

Gerard vs. Gateau, 188 

Gilbey vs. Hamlin, 44 

Gillilan vs. Myers, 159 

Grand Tower Manufacturing & 
Transportation Co. vs. Ull- 
man, 139 

Gregg vs. Ilhnois Central R. R. 
Co., 141 

Grier vs. Puterbaugh, 37 

Gross vs. Village of Grossdale, 
213 

Guyer vs. Warren, 31 

Guy man vs. Burlington, 53 



H 
Haas vs. Myers. 35 
Hagebush vs. Ragland, 126 
Hall vs. Harper, 87 
Hammond vs. Goodale, 174 
Harding vs. Gibbs, 32 
Harpham vs. Haynes, 174 
Harvey vs. Smith, 175 
Haug vs. Haug, 180 
Haverstick vs. Fergus, 115 
Hawes vs. Hawes, 214 
Haynes vs. Mason, 67 
Hazelton Boiler Co. vs. Hazel- 
ton Tripod Boiler Co., 200 
Henderson vs. Palmer, 54 
Henkel vs. Hey man, 192 
Herbert vs. Herbert, 214 
Herring vs. Woodhull, 168 
Heyman vs. Heyman, 184 
Holnback vs. Wilson, 225 
Honeyman vs. Jarvis, 60 
Howard vs. Babcock, 123 
Hoyt vs. Tuxburg, 92 
Huck vs. Fleytye, 36 
Hulbert vs. Hartman, 130 
Hursen vs. Gavin, 56 
Husband vs. Epling, 160 



Illinois Central R. R. Co. vs. 

Adams, 138 
Illinois Central R. R. Co. vs. 

Hall, 134, 136 
Illinois Central R. R. Co. vs. 

Hornberger, 137 
Illinois Central R. R. Co. vs. 

Johnson, 146 
Illinois Central R. R. Co. vs. 

Smyser, 138 
Illinois Central R. R. Co. vs. 

Treat, 143 



252 



TABLE OF CASES 



Illinois Land and Loan Co. vs. 

Bonner, 26 
Illinois State Hospital vs. Hig- 

gins, 201 
Indianapolis and St. Louis R. R. 

Co. vs. Herndon, 122 
Ingalls vs. Rowell, 55 
International Committee of Y. 

W. C. A. vs. Y. W. C. A. of 

Chicago, 199 
Irwin vs. Powell, 213 
Irwin vs. Sample, 49 



James vs. Morey, 64 
Jamieson vs. Wallace, 101 
Jerome vs. Bigelow, 52 
Johnson vs. Barber, 100 
Johnston vs. Maples, 27 
Jones vs. Foster, 43, 44 
Jones vs. Nellis, 111, 158 
Jones vs. Wright, 113 

K 

Kane vs. Cicero Proviso Electric 

Ry. Co., 148 
Keil vs. Healey, 24 
Kelly vs. Austin, 103 
Kelly vs. Hemmingway, 160 
Kelsey vs. Berry, 131 
Kenner vs. Harding, 107 
Klein vs. Seibold, 110 
Kohl vs. Lindley, 106 



Lake vs. Campbell, 221 

Lake Street Elevated R. R. Co. 

vs. Burgess, 144 
Larmon vs. Jordan, 31, 32 



LaSalle Restaurant vs. Mc- 

Masters, 131 
Latimer vs. Latimer, 211 
Leman vs. Best, 105 
Lenfers vs. Henke, 220 
Leonard vs. Dunton, 123 
Linn vs. Clark, 184 
Linn vs. Sigsbee, 56 
Linton vs. Porter, 108 
Lockridge vs. Foster, 49 

M 

Maclay vs. Harvey, 34 
Maher vs. Bull, 188 
Marsh vs. Astoria Lodge, 202 
Marsh vs. Fairbury, Pontiac and 

Northwestern R. R. Co., 70 
Mason vs. Dousay, 162 
Maus vs. Worthing, 85 
Mayer vs. Springer, 118 
Mayo vs. Chenoweth, 166 
McAnnulty vs. McAnnulty, 66 
McArthur vs. Howett, 122 
McArtee vs. Engart, 61 
McCaffrey vs. Dustin, 174 
McCall vs. Moss, 187 
McCarty vs. Carter, 27 
McClurken vs. Detrich, 70 
McCormick vs. Hadden, 113 
McCullough vs. Maryland, 194 
McDole vs. Kingsley, 61 
McFarlane vs. Williams, 58 
McGregor vs. Comstock, 210 
McKanna vs. Merry, 27 
McKinley vs. Watkins, 60 
McLanahan vs. Griffin, 224 
McLaughlin vs. Johnson, 102 
McMullen vs. Yanzant, 69 
McNevins vs. Lowe, 89 
Merchants' & Farmers' State 

Bank vs. Dawdy, 215 



TABLE OF CASES 



253 



Merchants Building Improve- 
ment Co. vs. Chicago Exchg. 
Bldg. Co., 36 

Merchants' Despatch Trans- 
portation Co. vs. Theilbar, 
135 

Metcalf vs. Hess, 131 

Meyer vs. Krohn, 190 

Meysenburg vs. The People, 204 

Michigan Central R. R. Co. vs. 
Carrow, 150 

Michigan Central R. R. Co. vs. 
Curtis, 140 

Mills vs. Larrance, 74 

Moir vs. Hopkins, 93 

Moore vs. Recek, 44 

Montgomery County vs. Robin- 
son, 38 

Morse vs. Thorsell, 223 

Murch vs. Wright, 113 

Murray vs. Doud, 115 

Musselman vs. Oakes, 166 

N 

Neil vs. Cummings, 47 

Nelson vs. First National Bank 

of Chicago, 164 
Nevil vs. Pullman Palace Car 

Co., 133 
New York, Chicago and St. 

Louis R. R. Co. vs. Blumen- 

thal, 143 
Noetling vs. Wright, 47 
North and South Rolling Stock 

Co. vs. People, 206 

O 

Oakes vs. Oakes, 221 
Ogden vs. Stock, 104 
Oliphant vs. Liversidge, 57 
Otto vs. Matthie, 88 



Pacific Express Co. vs. Shearer, 

142 
Pardridge vs. La Pries, 86, 87 
Parker vs. Enslow, 60 
Parmelee vs. McNulty, 132 
Peck vs. Brewer, 120 
Pennsylvania R. R. Co. vs. 

Purvis, 124 
People vs. Chicago and Alton 

R. R. Co., 134 
People vs. Chicago Gas Trust 

Co., 52, 198 
People vs. Chicago Live Stock 

Exchange, 198 
People vs. Ford, 20 
People vs. Johnson, 57 
People, vs. Kankakee River 

Improvement Co., 206 
People vs. Pullman Palace Car 

Co., 197 
People of the State of Illinois 

vs. Ford, 20 
Peoria and Pekin Union Ry. Co. 

vs. Buckley, 71 
Perry vs. Engel, 90 
Phelps vs. Illinois Central R. R. 

Co., 137 
Phillip vs. Stevens, 68 
Pittsburg, Cincinnati and St. 

Louis Ry. Co. vs. Thompson, 

148 
Pittsburg, Ft. Wayne and 

Chicago R. R. Co. vs. Hazen, 

136 
Plummer vs. People, 50 
Pope vs. Dodson, 58 
Pope vs. Hanke 101, 176 
Potts vs. Davenport, 226 
Pratt vs. Trustees of Baptist 

Society, 33 



254 



TABLE OF CASES 



Prins vs. South Branch Lumber 

Co., 174 
Pullman Palace Car Co. vs. 

Reed, 147 
Pullman Palace Car Co. vs. 

Smith, 128, 133 

R 

Rapp vs. Phoenix Insurance Co., 

96 
Remick vs. Emig, 188 
Rendleman vs. Rendleman, 51 
Reynolds vs. McCurry, 25 
Richardson vs. Gregory, 187 
Richardson vs. Hadsall, 57 
Richardson vs. Kelly, 53 
Rigdon vs. Walcott, 51 
Robinson vs. Harvey, 108 
Rockhill vs. Congress Hotel Co., 

130 
Rupley vs. Daggett, 30, 41 
Ryan vs. Hamilton, 56 
Ryder vs. Alton and Sangamon 

R. R. Co., 203 



Slaughter vs. Fay, 168 

Smith vs. Kneer, 226 

Smith vs. Moore, 103 

Smith vs. Price, 102 

Spaids vs. Barrett, 50 

Spalding vs. Heideman, 90 

Spangler vs. Eicholtz, 126 

Springer vs. Schultz, 149 

Stacker vs. Hewitt, 59 

State of Illinois vs. Ford, 20 

Stevens vs. Park, 71 

St. Louis, Alton and Terre 
Haute R. R. Co. vs. Mont- 
gomery, 139 

St. Louis, Alton and Terre 
Haute R. R. Co. vs. South, 
147 

Stoehlke vs. Hahn, 86 

Stone vs. Kellogg, 204 

Stophlet vs. Hogan, 39 

Summers vs. Hibbard and Co., 
68 

Sword vs. Low, 104 



Saladin vs. Mitchell, 94 
Sands vs. Potter, 28, 96 
Sands vs. Sands, 47 
Santa Clara Female Academy 

vs. SulHvan, 201 
Sayles vs. Christie, 26 
Schaper vs. Schaper, 42 
Schneider vs. Westerman, 111 
Sever vs. Lyons, 226 
Shackelton vs. Lawrence, 46 
Sharp vs. Parks, 110 
Sheffer vs. Willoughby, 128 
Shelton vs. Frank] in, 112 
Shipley vs. Carroll, 30, 158 
Shuey vs. United States, 39 



Tascott vs. Rosenthal, 107 

Taylor vs. Taylor, 92 

Teal vs. Felton, 127 

Tenney vs. Foote, 184 

Toledo, Wabash and Western Ry. 
Co. vs. Harmon, 93 

Toledo, Wabash and Western 
Ry. Co, vs. Beggs, 144 

Totten vs. Totten, 227 

Trustees of Dartmouth College 
vs. Woodward, 205 

Tumalty vs. Parker, 122 

Turner vs. Hause, 217 

Tyler vs. Sanborn, 83 

Tyler, UUman & Co. vs. West- 
ern Union Telegraph Co., 133 



TABLE OF CASES 



255 



U 

Union Strawboard Co. vs. Bon- 
field, 56 

V 

Van Housen vs. Copeland, 181 
Vaughn vs. Owens, 36 
Virgin vs. Virgin, 223 

W 

Wadsworth vs. Duncan, 192 
Wagner vs. City of Rock Island, 

196 
Wald vs. Pittsburg, Cincinnati, 

Chicago and St. Louis R. R. 

Co., 135, 150 
Walker vs. Ellis, 24 
Walker vs. Rogers, 164 
Walker vs. Tucker, 68 
Watson vs. Doyle, 29 
Warrick vs. Smith, 90 
Watts vs. Parker, 210 
Weeger vs. Mueller, 161 
W^ells vs. People, 52 
West Chicago Street R. R. Co. 

vs. Walsh, 148 



Weston vs. Myers 65, 159, 168 
Wheeler vs. County of Wayne, 

216 
Wiedeman vs. Keller, 106, 109 
Williams vs. Forbes, 57 
Williams vs. Moore, 130 
Williams vs. West Chicago 

Street R. R. Co., 38 
Wolf vs. Deitzsch, 108 
Woods vs. Devin, 150 
Woods vs. Evans, 37 
Wood vs. Price, 171 
Wood vs. Surrells, 171 
Wooley vs. Lyon, 173 
Wooley vs. Yarnell, 75 
World's Columbian Exposition 

vs. Richards, 87 



Yates vs. Valentine, 74 
Young vs. Young, 45 



Zimman vs. Miller Hotel Co., 
149 



INDEX 



( 



INDEX 



Abandoning homesteads, 226 
Abstract of Title, 209 
Acceptance, 33, 34, 35, 36, 163, 

214 
Accord, 73, 74 
Accord and Satisfaction, 73, 

74 
Accounts, 184, 204 
Acknowledgment, 214 
Act of God, 130, 135 
Act of Guest, 130 
Act of Parties, 106 
Act of Public Authority, 

130 
Act of Public Enemy, 130, 

135 
Act of Shipper, 135, 136 
Actual Annexation, 102, 104 
Admiralty, 12 
Agency, 83 
Agency Coupled with Interest, 

95 
Agent, 83 

Agent's Obligations, 89 
Agent's Title, 111 
Alteration, 73 
Apparent Scope of Authority, 

84,92 
Assessments, 209, 218, 225 
Assignment, 75 
Attachment, 102 
Attorney General, 15, 17, 18 
Attributes, Corporation, 199 
Axiom, 87 



B 

Baggage, 143 
Baggage (Defined), 149 
Bailment (Defined), 101, 118 
Bailor (Defined), 119 
Bankruptcy, 73, 186 
Barter (Defined), 100 
Bidding, 54 
Bills of Exchange, 162 
Boarding Housekeeper, 129 
Board of Directors, 204 
Breach of Condition, 107 
Breach of Contract, 72 
By-Laws, 199, 202 



Cancellation, 176 

Care, 125 

Care of Agent, 89 

Care Required, 124 

Caveat Emptor, 105 

Certainty of Terms, 37 

Certified Checks, 165 

Chancellor, 9 

Chancery Court, 9 

Chattel Mortgage, 114, 227 

Charter, Forfeiture, 194, 20d 

206 
Charter, Repeal, 205 
Charter, Surrender, 207 
Checks, 162, 164 
Civil Law, 7, 9 
Civil Law (Defined), 3 
Circuit Court of Appeals, 14 
Classes of Bailments, 119 



259 



260 



INDEX 



Clerks, 15, 17, 18 
Combinations, 54, 206 
Commercial Law (Defined), 4 
Common Carriers, 119, 120, 

124, 127, 130, 132 
Common Law, 4, 5, 7, 8, 9, 

217, 223 
Common Law (Defined), 5 
Common Pleas Court, 7 
Common Stock, 197 
Competent Parties, 23 
Compromises, 60, 61, 73, 74 
Compulsion, 50 
Consideration (Defined), 56 
Constructive Annexation, 102 
Conditions, 106 
Conditional Sales, 112, 114 
Congress, 4 
Conservator, 26 
Consideration, 30, 31, 56, 57, 

58,59 
Constitution of Illinois, 4, 218 
Constitution of United States, 

4, 12, 218 
Constitutional Convention, 4 
Contract (Defined), 19 
Contracts with Enemy, 53 
Corners, 54 

Corporate Accounts, 204 
Corporate Books, 204 
Corporate Powers, 197 
Corporate Seal, 199, 202 
Corporations (Defined), 194 
Corporation Attributes, 199 
Corporation By-laws, 199, 202 
Corporations, History, 194 
Corporation Management, 203 
Corporations May Sue, 199, 

201 
Corporation Property, 199, 200 
Courts, Illinois, 16 



Courts, United States, 14 
Court of Common Pleas, 7 
Courts of Equity, 207 
Covenants, 216, 222 
Creation of Agency, 84, 85 
Creditors, 214, 218 
Criminal Law (Defined), 3 
Criminals, 145 

D 

Damages, 69, 96, 115, 187 

Death, 96, 186 

Debts, 65, 225 

Deceit, 47 

Deeds, 209 

Deed (Defined), 211 

Default, 65 

Defense Against Claimants, 217 

Dehvery, 140, 157, 214 

Demand, 171 

Directors, 204 

Discharge of Contract, 70 

Dishonored, 171 

District Attorney, 15 

District Courts, 14 

Destruction of Subject Matter, 

96 
Dissolution of Corporations, 205 
Dividends, 205 
Dowers, 223, 224, 225 
Drafts, 162 

Drawer's Contract, 171 
Drunken Person's Contracts, 29 
Due Course, 173 
Duress, 40, 50 

E 

Edward III, 9 
Elevator, 143 

Emblements (Defined), 219 
Enemy, 53 



INDEX 



261 



Eminent Domain, 218 
Equity, 9, 12, 207, 228 
Essentials of Contracts, 22 
Essentials of Negotiable In- 
struments, 158 
Estates, 217 

Estate for Life (Defined), 219 
Estate for Years, 217 
Estate for Years (Defined), 220 
Estate in Fee Simple, 217 
Exchequer Court, 7 
Executed Contracts, 19, 57 
Executive, 6 
Executors, 27, 65 
Executory Contracts, 19 
Express Company, 132, 140, 

141 
Express Contracts, 19, 118, 180 
Express Covenants, 222 
Express Warranty, 107 



Fair Value, 174 

Fee, 217 

Fee Simple Estates, 217 

Fee Simple Estates (Defined) , 

217 
Ferry Boat, 143 
Fictitious Attachment, 102 
Fiduciary, 83 

Fiduciary Relation, 47, 48, 49 
Filing, 214 
Finder's Title, 110 
Firm Name, 183 
Fixture, 102 

Fixtures, When Removable, 105 
Foreclosure, 228 
Foreign Bills, 162, 172 
Forfeiture, 206 
Forgery, 175 
Formal Contracts, 20 



Fourth Section of the Statute 
of Frauds, 63, 85, 181, 211, 
221 

Fraud, 40, 42, 46, 51, 124, 142, 
175 

G 

Gambling Contracts, 53, 101 
General Partnership, 183 
General Agent, 84 
Gift, 57, 58, 100 
Good Consideration, 56, 57 
Good Faith, 174, 184 
Grantee, 212 
Gratuitous, 119, 123 
Gratuitous Act, 37 
Gratuitous Bailee, 119, 132 
Guest, 129 

H 

Hindering Bidding, 54 
Hindering Justice, 53 
Holder, 175 
Holder's Rights, 173 
Holding Property, 199 
Homestead, 225 
Homesteads, Abandoning, 226 
Householder, 225 

I 

Illegal Leases, 221 
Illinois Courts, 16 
Implied Contract, 19, 118, 180 
Implied Covenant, 222 
Imphed Warranty, 108 
Incumbrances, 216 
Indorsement (Defined), 168 
Indorser, 175 
Infant's Contracts, 23 
Infant's Disaffirments, 24 
Influence in Legislation, 55 



262 



INDEX 



Inland Bills, 162, 172 
Innkeepers, 119, 120, 124, 127, 

128 
Insane Person's Contracts, 28, 

33 
Insanity, 33, 96 
Insolvency, 114 
Insolvent, 114 
Installment Sales, 112 
Insurance, 220 
Intention, 30, 36, 104, 111 



Joint Notes, 170 

Joint Stock Companies, 192 

Judges, 15, 17 

Judgment, 73, 74, 202, 209 

Judicial Proceedings, 186, 188 

Jurisdiction, 12, 13, 17 

Justice, 53 

Justice of Peace, 13 



K 

King's Bench, 7 



Landlord, 103, 223 

Lapse of Offer, 32 

Law, 3 

Law Courts, 7, 9 

Lawful Seizen, 216 

Law Merchant, 8 

Lawyer, 209 

Leases, 221 

Legal Subject Matter, 51 

Legal Tender, 70, 71 

Legislative, 6, 12 

Legislature, 5 

Let the Buyer Beware, 105 

Liability, 147 

Liability of Carrier, 150 



Liability of Partners, 186 
Lien, 121, 131 
Life Estates, 217 
Limited Liability, 199, 201 
Limited Partnership, 191 
Livery of Seizen, 210 
Lobbying, 55 
Log Rolling, 55 
Louisiana, 9 
Loyalty of Agent, 90 

M 

Majority, 204 

Makers of Contract, 170 

Mark, 159 

Marriage Consideration, 65 

Marriage Estate, 223 

Married Women, 23, 88, 183 

Marshalls, 15 

Merger, 73 

Military Courts, 13 

Minors, 23 

Misbehavior, 186, 188, 189 

Miscarriages, 65 

Misconduct, 140, 188 

Misrepresentation, 40, 43, 47, 51 

Mistake, 40, 41, 142 

Monopoly, 206 

Mortgagee, 103, 212 

Mortgages, 114, 121, 209, 211 

Mortgages (Defined), 101, 227 

Mortgagor, 103, 212 

N 

Name, 199 

National Rights, 6 

Nature of Goods Themselves, 

130, 135, 137 
Necessaries, 27, 28 
Neghgence, 93, 124, 130, 132, 

140 



INDEX 



263 



Negligent, 130 

Negotiable, 157 

Negotiable Instruments (De- 
fined), 157 

Negotiable Instrument Law, 8, 
59 

Negotiation, 168 

Non-stock Corporations, 196 

Notice, 172, 173, 183, 190, 191, 
214, 215 

Notice of Dishonor, 172 

O 

Obedience of Agent, 87 
Obligations of Agent, 89, 91 
Obligation of Principal, 92 
Obligation of Third Parties, 94 
Offer and Acceptance, 29 
Operation of Law, 88, 96, 186, 

188 
Opinion, 45 



Parliament, 4, 63 
Partnership Agreements, 182 
Partnership (Defined), 180 
Partner's Duties, 184 
Partner's Powers, 184 
Partner's Rights, 184 
Passenger, 143 
Passenger Carriers, 143 
Past Consideration, 62 
Pawn, 121 
Pawnbroker, 121 
Perpetual Succession, 199 
Personal Property (Defined), 

100, 209 
Pledge, 121 
Possession, 223 

Postmasters, 119, 120, 124, 127 
Power of Attorney, 28, 29 



Precedents, 9, 10 

Preferred Stock, 197 

Presentment, 171, 172 

Presumption, 103 

Principal, 83 

Private Corporations, 195, 196 

Promissory Notes, 162 

Promissory Notes (Defined) , 166 

Protest, 171, 172 

Proxy, 203 

Public Corporations, 195 

Public Sales, 54 

Puffing, 46, 49 

Pullman Company, 133 

Purpose of Fixture, 104 

Q 

QuaHfications, 33, 34 
Quasi-public Corporation, 195 
Queen's Bench, 7 
Quiet Enjoyment, 217, 222 
Quiet Possession, 216 
Quit-claim Deed, 215 

R 

Ratification, 26, 85, 92 

Real Estate Mortgage, 114, 227 

Real Property (Defined), 209 

Realty of Consent, 40 

Recompense, 120 

Redemption, 228 

Referee, 15 

Release, 73, 74, 225 

Remedies, 69, 114, 115, 116 

Rent, 222 

Renunciation, 96 

Repair, 220 

Requisites of Deeds, 211 

Restaurant Keeper, 131 

Restraint of Trade, 55 

Revocation, 39 



264 



INDEX 



Rewards, 38, 39 
Rights of Dower, 225 
Right to Convey, 216 



Sale (Defined), 100 
Scope of Authority, 84, 92 
Seal, 20, 59, 85, 199, 202, 211, 

213 
Security, 121 
Seller's Title, 109 
Separation of Goods, 112 
Seventeenth Section of the 

Statute of Frauds, 67, 101 
Several Notes, 170 
Sheriff, 17, 18 
Signature, 64, 159, 211, 212, 

213 
Simple Contracts, 20 
Sleeping Car Co., 133 
Special Agent, 84 
Special Name, 199 
Special Partnership, 183 
Specific Performance, 69 
State Attorney, 17, 18 
State Rights, 6 
Statute Law, 5 
Statute of Frauds, 63, 85, 221 
Statute of Frauds (Fourth 

and Seventeenth Combined) 

211 
Statute of Limitations, 73, 74, 

75 
Stock, 196, 197 
Stock Corporation, 196, 197 
Stockholder's Rights, 197 
Stoppage in Transit, 114 
Street Railway, 143 
Sub-agents, 88, 89 
Sub-letting, 222 
Sufficiency of Consideration, 61 



Supreme Court, 14 
Surrender of Charter, 207 



Taxation, 206 

Taxes, 209, 218, 225 

Taxi-cab, 143 

Tax Title, 41 

Telegraph Company, 132 

Telephone Company, 132 

Tenant, 103 

Termination of Agency, 95 

Tests, 104 

Thief, 158 

Thief's Title, 110, 111, 158 

Ticket, 143, 146, 147 

Title, 109, 110, 111, 119, 

209 
Torrens System, 210 
Township, 212, 213 
Trade Fixtures, 103 
Treaties 4, 12 
Trial, 8 

Trust Deed, 215, 228 
Trustee, 228 

U 

Ultra Vires Acts, 198 
Undue Influence, 40, 47, 48 
United States Courts, 14 
Unwritten Contracts, 20 
Usury, 55 



Valid Contracts (Defined), 21 
Valuable Consideration, 58 
Value of Consideration, 58 
Vendee, 103 
Vendor, 103 

Void Contracts (Defined), 21, 
22 



INDEX 265 

Voidable Contracts (Defined), Warranty Deed, 215, 216 
21 Waste (Defined), 220, 222 

When Title Passes, 111 
Withdrawal of Offer, 30, 31 

War, 96 Without Recourse, 170 

Warehousemen, 142, 151 Written Contracts, 20 

Warranty, 107, 108 Wrongs, 94 



W 



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